President Joe Biden is set to address the economy during a campaign event in Syracuse, New York on Thursday afternoon starting at 1:30 p.m. ET. His speech comes at a time when a report has shown a significant slowdown in the nation’s economy, with growth dropping to a 1.6% annual pace in the first quarter of the year due to high interest rates.
Despite these challenges, key components of the economy remain robust, with strong contributions from both households and businesses in driving economic growth last quarter. Economist Paul Ashworth noted that there is still positive momentum in the economy, despite the volatile import and inventory figures.
The Commerce Department’s report released on Thursday revealed that the deceleration in the gross domestic product (GDP) from an impressive 3.4% growth rate in the previous quarter was largely attributed to a surge in imports and reductions in business inventories, which both had a negative impact on growth. However, consumer spending, a key driver of economic activity, rose by a solid 2.5% annual rate in the first quarter, driven by increased spending on services. Americans spent more on services like entertainment, dining, and travel, with a 4% increase in spending – the fastest growth since mid-2021.
However, spending on goods such as appliances and furniture saw a slight decline of 0.1%,