President Joe Biden is set to deliver remarks on the economy during a campaign event in Syracuse, New York, on Thursday at 1:30 p.m. ET. This speech comes after a report that showed a significant slowdown in the nation’s economy last quarter, with a 1.6% annual pace, despite high interest rates. The Commerce Department’s report indicated that there was a deceleration in the gross domestic product (GDP) in the January-March quarter, down from a brisk 3.4% growth rate in the previous three months.
A surge in imports and subtracted from GDP had a negative impact on growth by nearly 1 percentage point, while businesses reduced their inventories contributed to the slowing economy. Despite these fluctuations, core components of the economy such as household and business investments showed strength during the last quarter. Economists like Paul Ashworth remain optimistic about the positive underlying momentum in the economy.
Price pressures continue to be a concern for the Federal Reserve, with inflation accelerating to a 3.4% annual rate from January through March, representing the biggest increase in over a year. Excluding food and energy prices, core inflation rose at a 3.7% rate, up from 2% in the final quarter of 2023. Consumer spending saw an annual rate increase of 2.5%, with spending on services such as movie tickets and restaurant meals rising notably but spending on goods such as appliances and furniture saw a slight decline of -0.1%, marking the first drop since summer of 2022
