U.S. economic growth in the first quarter was slower than originally thought.
Secondary estimates of U.S. gross domestic product (GDP) for the first quarter released by the U.S. Bureau of Economic Analysis show that economic growth in the same period grew at an annualized pace of 1.3%, compared to the first quarter of April. This was revised downward from the 1.6% increase reported in the next statistics, and was in line with economists’ expectations.
BEA said the first quarter growth update “mainly reflected downward revisions to consumer spending.” Personal consumption growth rate in the first quarter was 2%, down from the previously announced 2.5%.
This figure was significantly lower than fourth-quarter GDP, which was revised upward to 3.4%.
Nationwide Financial Markets Economist Oren Krachkin said of this morning’s first-quarter release, “While the weak headline growth statistics seem disappointing, domestic private sales to domestic buyers, the core of the economy, are increasing at an annual rate. “It shows a healthy expansion of 2.5%, which belies solid momentum.” GDP revised data.
Inflation turned out to be firmer than expected, with markets sensitive to any indicators that the economy may be overheating against the Federal Reserve’s liking. A slowdown in GDP occurred. The worry is that rapid growth will accelerate price increases.
Read more: How does the labor market affect inflation?
Many forecasters don’t think the slowdown in economic growth in the first quarter is the start of a broader trend. Prior to Thursday’s announcement, Goldman Sachs had forecast second-quarter growth at an annualized rate of 3.2%. Meanwhile, the Atlanta Fed’s GDPNow forecasters are currently predicting 3.5% annualized growth in the second quarter.
“Monthly statistics since March have generally shown that the economy is continuing to expand, albeit with a moderate cooling,” Kurachkin said. “We expect continued GDP growth this year and healthy progress in 2024 as a whole. “It will be done,” he said.
Full view of the American flag on the field during the national anthem at the Alamo Bowl. (Kirby Lee-USA TODAY Sports) · USA TODAY Sports via Reuters Connect / Reuters
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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