The U.S. economy experienced a slowdown in the first quarter, but an increase in inflation suggests that the Federal Reserve may not lower interest rates before September. According to the Commerce Department’s Bureau of Economic Analysis, gross domestic product grew at an annualized rate of 1.6%, driven primarily by consumer spending. This was below the forecasted growth rate of 2.4%, but above the non-inflationary growth rate of 1.8%.
The International Monetary Fund recently revised its forecast for U.S. growth in 2024 to 2.7%, up from the initial projection of 2.1%. This adjustment was due to stronger-than-expected employment and consumer spending, with job gains in the first quarter averaging 276,000 per month compared to the previous quarter’s average of 212,000. Despite concerns about a slowdown following the Fed’s rate hikes, the U.S. economy continues to outperform other advanced economies due to consumers taking advantage of lower mortgage rates and businesses refinancing debt before the tightening cycle began.
The resilience of the U.S