President Joe Biden is scheduled to speak about the economy during a campaign event in Syracuse, New York on Thursday afternoon at 1:30 p.m. ET. His address comes at a time when the nation’s economy has experienced a significant slowdown, with growth dropping to an annual pace of 1.6% in the first quarter of 2023 due to high interest rates.
According to a report released by the Commerce Department on Thursday, the decline in GDP from a growth rate of 3.4% in the previous quarter was primarily due to an increase in imports and decreases in business inventories, which both had a negative impact on growth. Despite these challenges, key components of the economy remain strong, with strong contributions from households and businesses driving economic growth last quarter. Economist Paul Ashworth noted that there is still positive momentum in the economy, despite volatile import and inventory figures.
However, price pressures continue to be a concern for the Federal Reserve as inflation rates rose to an annual rate of 3.4% in the first quarter of 2023, up from 1.8% in the previous period. Core inflation, excluding food and energy prices also increased to a rate of 3.7%, up from 2% in the last three months of 2023. Consumer spending, a key driver of economic activity, increased by an annual rate of 2.5% in the first quarter, driven by increased spending on services like entertainment, dining and travel with a solid growth rate of 4%, representing one of the fastest increase since mid-2021
