The U.S. economy’s growth in the first quarter slowed more than expected, but an increase in inflation suggests that the Federal Reserve may not lower interest rates before September. According to the Commerce Department’s Bureau of Economic Analysis, gross domestic product increased at a 1.6% annualized rate, with growth primarily driven by consumer spending. This was below the 2.4% rate predicted by economists, but above the non-inflationary growth rate of 1.8%.
In contrast to this slowdown, recent data shows that job gains in the first quarter averaged 276,000 per month, compared to the previous quarter’s average of 212,000. Despite concerns of a slowdown following the Fed’s rate hikes, the U.S. economy continues to outperform other advanced economies due to its resilience and strength in certain areas like employment and consumer spending.
The International Monetary Fund recently revised its forecast for U.S. growth in 2024 from 2.1% projected in January to 2.7%, reflecting stronger-than-expected employment and consumer spending as well as refinancing debt and lower mortgage rates taken advantage of by consumers and businesses before the tightening cycle began.
Despite these challenges, such as slower-than-expected growth in the first quarter and rising inflation expectations, experts remain optimistic about the overall outlook for the U