US Economy Records Slower GDP Growth in 1Q24 as Consumer Spending Fades

The US economy expanded at a slower pace than initially reported in the first quarter, with the Bureau of Economic Analysis releasing a revised estimate of 1.3% annualized growth, down from the initial 1.6%.

This adjustment was largely driven by a decrease in consumer spending, which dropped from 2.5% to 2%. Notably, the first quarter figures lagged behind the 3.4% growth seen in the fourth quarter.

The revised GDP figures have raised concerns amidst a backdrop of heightened market sensitivity to signs of overheating that could prompt intervention from the Federal Reserve due to persistently higher inflation. The fear is that rapid economic expansion could exacerbate price pressures.

Despite the disappointing first quarter results, many analysts do not view this as the beginning of a broader economic slowdown. Goldman Sachs anticipates 3.2% growth for the second quarter, while the Atlanta Fed’s GDPNow forecaster is even more optimistic, projecting 3.5% annualized growth for the same period.