Economic Growth Plummets in Q1, Raising Concerns of Job Creation and Rising Unemployment Ahead of Mid-Year Elections

The US economy experienced less growth than expected in the first quarter of 2024, according to the Commerce Department. This news comes as President Joe Biden prepares for a potential re-election campaign against former President Donald Trump in November. The data showed a 1.6% GDP growth rate in the first three months, falling short of the 2.4% predicted by analysts. This decline follows a 3.4% growth rate in the previous quarter and is attributed to decreases in consumer spending, exports, and state, federal, and local spending.

Despite this drop in economic growth, the US remains ahead of other major industrialized economies when it comes to economic outlook. The International Monetary Fund (IMF) predicts a 2.7% growth rate for the US in 2024, up from last year’s prediction of 2.5%. This growth rate surpasses that of other G7 countries by more than double, with Germany only expecting a 0.3% growth rate.

While Europe’s largest economy shows some signs of improvement, the US still leads in economic performance. Most G20 currencies have also depreciated against the US dollar this year.

Inflation rates have decreased to 3.5%, but prices are still higher than pre-pandemic levels due to ongoing supply chain disruptions and global trade tensions.

Although the US’s growth rate may be lower than anticipated, it remains stronger compared to other major economies. As the country navigates these challenges, upcoming election campaigns will likely spotlight these issues and their impact on voters.

The weaker-than-expected GDP growth highlights the ongoing challenges facing American households and businesses during this time of economic uncertainty.

The slowdown in economic growth is also raising concerns about job creation and rising unemployment rates across different sectors of the economy.

As policymakers grapple with these challenges, they are likely to focus on implementing measures that can stimulate demand and boost economic activity while addressing inflationary pressures.

Overall, while there are some concerns about slowing down economic momentum heading into mid-year elections