Konkanako Surveyor – Weak US economy: GDP grows “barely” 1.3% during the first quarter of 2024

US GDP lost ground during the first quarter of 2024. (Shutterstock)

Weak US economy: GDP grows “barely” 1.3% during the first quarter of 2024

By Evie

Analysts consider that the United States' gross domestic product remains “solid” in the face of the suffering global economy.

Economic activity in the United States started weakly this year, because during the first quarter, between January and March, a noticeable slowdown was observed.

Data released by the Commerce Department show that US gross domestic product grew at a 1.3 percent annualized quarterly rate, a level three-tenths lower than the initial estimate.

This is the first adjustment made by the government in its calculations for this indicator, as a slowdown in economic activity was observed between January and March, after the 3.4 percent increase recorded in the last quarter of 2023.

Data from the Bureau of Economic Analysis (BEA), which is in line with consensus forecasts among analysts, shows that the US economy remains strong compared to the dismal global economy.

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On the other hand, consumer spending, the indicator that represents the main driver of economic growth in the United States, recorded a 2 percent increase between January and March, after reaching a 3.3 percent increase during the previous quarter.

“Under the second estimate, downward revisions in consumer spending, private inventory investment, and federal government spending are offset, in part, by upward revisions in state and municipal government spending, nonresidential fixed investment, residential fixed investment, and exports.” Bea pointed out.

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The US economy was able to end 2023 with an average expansion of 3.1 percent, a situation that allowed fears of a recession to dissipate after the Covid-19 pandemic and despite the tightening of monetary policy by the Federal Reserve Bank (Federal Reserve). Economic inflation.

Federal Reserve members noted that the overall outlook for US economic activity has become somewhat “more pessimistic,” due to “increased uncertainty and increased downside risks.”

In addition, the Federal Reserve has kept the interest rate at a level between 5.25 and 5.50 percent since July last year. This represents the highest level since 2001.

Inflation provides a “respite” to the US economy

The inflation rate in the US economy fell by a tenth during the month of April, reaching 3.4%, after two months of consecutive increases.

The US Bureau of Labor Statistics (BLS) said that consumer prices rose three-tenths compared to March, which is less than one-tenth of the monthly increase recorded in March compared to February.

While core inflation decreased internally by two tenths to reach 3.6 percent, and rose on a monthly basis by three tenths.

This data could give some comfort to the US Federal Reserve and its plans to cut interest rates sometime this year.

fountain: Finance

Aileen Morales

"Beer nerd. Food fanatic. Alcohol scholar. Tv practitioner. Writer. Troublemaker. Falls down a lot."

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