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The US economy grew at a slower pace than initially thought in the first quarter
The US economy grew more slowly than initially thought during the first quarter.
The Bureau of Economic Analysis second estimate of US gross domestic product (GDP) in the first quarter) showed that the economy grew at an annualized pace of 1.3% during the period, below the first reading in April Growth of 1.6% and in line with economists’ estimates.
The Q1 growth metric update “primarily reflected a downward revision in consumer spending,” according to the BEA. Personal consumption in the first quarter grew 2%, down from the previous reading of 2.5%.
The reading was significantly lower than fourth-quarter GDP, which was revised to 3.4%.
“The weaker growth statistic looks bleak, but it belies the solid underlying momentum, as the core of the economy – private domestic sales to domestic buyers – showed a healthy 2.5% annualized expansion,” the National Financial Markets Economist wrote. Oren Klachkin on this morning’s Q1 release. GDP revision data.
The slowdown in global GDP occurs at a time when markets have been sensitive to any readings that indicate the economy may be too hot for the Federal Reserve’s liking, as inflation turned out to be more rigid than expected. The concern is that accelerated growth would drive price increases.
See more information: How does the job market affect inflation?
Many analysts do not see the slowdown in economic growth in the first quarter as the start of a broader trend. Before Thursday’s reading, Goldman Sachs had expected annualized growth of 3.2% in the second quarter. Meanwhile, Atlanta Fed analyst GDPNow currently projects 3.5% annualized growth in the second quarter.
“Monthly data after March generally point to continued, albeit mildly cooling, economic expansion,” Klachkin wrote. “We anticipate continued GDP gains this year and healthy progress into 2024 overall.”
A general view of the United States flag on the field during the playing of 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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