US Q1 Economic Growth Adjusted Downward

The US economy grew more slowly in the first quarter of the year than initially estimated, with GDP increasing at an annualized rate of 1.3%, down from the previously reported 1.6%.

This marks a significant decline from the 3.4% growth rate observed in the fourth quarter of 2023. The revision reflects weaker consumer spending and recent sluggishness in retail sales and equipment spending.

Inflation during the first quarter was also revised slightly downward to 3.3% from 3.4%.

Despite this reduction, it represents the highest quarterly inflation rate in a year, contrasting with the easing trend observed through most of the previous year. The unexpected rise in inflation has prompted Federal Reserve policymakers to delay anticipated interest rate cuts.

The revised GDP figure is the lowest growth rate since the second quarter of 2022, when the economy contracted. It also falls short of the 1.8% growth rate considered the long-term noninflationary potential by Federal Reserve officials.

Despite the slow start, the outlook for the second quarter is more optimistic, partly due to the continued strength of the job market. This resilience is expected to support economic activity and potentially offset the earlier weakness seen in the first quarter.