The US economy has been experiencing a slowdown in its growth, but the increase in inflation suggests that the Federal Reserve will not lower interest rates before September. According to the Commerce Department’s Bureau of Economic Analysis, gross domestic product increased at an annualized rate of 1.6% in the first quarter, driven mostly by consumer spending. This was below the predicted 2.4% growth rate, but above the non-inflationary growth rate of 1.8%.
Despite this slower growth, economists are optimistic about the future of the US economy. The International Monetary Fund recently revised its forecast for US growth in 2024 to 2.7%, up from its previous projection of 2.1%. This change was due to stronger-than-expected employment and consumer spending, with job gains averaging 276,000 per month in the first quarter compared to the previous quarter’s average of 212,000.
The resilience of the US economy is being attributed to consumers taking advantage of lower mortgage rates and businesses refinancing debt before the tightening cycle began. Despite challenges such as slower-than-expected growth in the first quarter, experts remain optimistic about the overall outlook for the US economy.
