The new report from the US Commerce Department released on Thursday showed a slowing of GDP growth and a decline in spending in the first quarter of 2024. This is the slowest growth since the second quarter of 2022.
From January through March, GDP increased at a 1.6 percent annualized pace when adjusted for seasonality and inflation, according to the Commerce Department’s Bureau of Economic Analysis. This falls short of predictions made by economists surveyed by Dow Jones, who had forecasted a 2.4 percent increase after the 3.4 percent in Q4 2023 and 4.9 percent in Q3 2024. Economists that responded to a Wall Street Journal survey also averaged at 2.4 percent.
Meanwhile, consumer spending only increased by 2.5 percent in this time frame, short of the 3 percent estimate from Wall Street and representing a decline from the 3.3 percent gain in the fourth quarter.
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The GDP was buoyed up by fixed investment and government spending at the state and local levels. It was hurt by a decrease in private inventory investment and an increase in imports.
Consumer spending added 1.68 percentage points, while net exports took away 0.86 percentage points.
Following the report, US stock futures dipped while yields on benchmark 10-year Treasurys slightly increased.
The report shows that American consumers are still spending on healthcare, insurance, and similar services, while they have pulled back on consumer goods, cars, gasoline, and so on.
Shane Devine is a writer covering politics and business for VT and a regular guest on The Unusual Suspects. Follow Shane’s work here.
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