US’ Economic Growth In First Quarter Was Even Worse Than Previously Thought

The U.S. economy grew less than previously thought in the first quarter of 2024 amid a slowdown in consumer spending, the Bureau of Economic Analysis (BEA) announced Thursday.

Gross domestic product (GDP) was revised down in the first quarter from 1.6% to 1.3% year-over-year in a sign that the economy is not as strong as initial estimates indicated, according to a release from the BEA. Economists originally expected growth in the first quarter to be around 2.2%, more in line with the above trend growth seen in the third and fourth quarters of 2023, which were 4.9% and 3.4%, respectively.

The revision was due to new information that shows that consumer spending, private inventory investment and federal government spending were lower than initial estimates, while state and local government spending, nonresidential and residential fixed investment and exports were slightly greater than original tallies, according to the BEA. Current-dollar GDP was also revised down to 4.3% from 4.8%, and real gross domestic income totaled just 1.5% in an initial estimate from the BEA.

Disappointing GDP reports have spurred fears that the economy is entering a period of stagflation marked by slow economic growth and high inflation. Inflation measured at 3.4% year-over-year in April, staying stubbornly above 3% since it peaked under President Joe Biden at 9% in June 2022.

Federal Reserve Chair Jerome Powell pushed