The growth of the US economy in Q1 was slower than originally estimated

The US economy grew at a slower pace than initially estimated in the first quarter, according to the Bureau of Economic Analysis. The second estimate of first quarter gross domestic product (GDP) showed a growth rate of 1.3%, down from the initial reading of 1.6%. This revision was primarily due to a decrease in consumer spending, which grew at 2% compared to the previous estimate of 2.5%.

Despite the lower than expected growth, economists remain optimistic about the overall health of the economy. Oren Klachkin, a financial markets economist, noted that the core of the economy, private domestic sales to domestic purchasers, showed a healthy expansion of 2.5% annualized.

The slowdown in GDP growth comes at a time when the Federal Reserve is closely monitoring inflation levels. The concern is that rapid economic growth could lead to higher prices. However, many forecasters do not see the first quarter slowdown as a sign of a broader trend. Goldman Sachs expects 3.2% growth in the second quarter, while the Atlanta Fed’s GDPNow forecaster is projecting 3.5% growth.

Overall, experts anticipate continued GDP gains throughout the year and a healthy advance in 2024. Despite the slight setback in the first quarter, the economy is expected to remain on a positive trajectory.