The U.S. economy is experiencing a slowdown in growth, with Gross Domestic Product (GDP) increasing at a 1.6% annualized rate in the first quarter of the year, according to the Commerce Department’s Bureau of Economic Analysis. Despite this, economists surveyed by Reuters had predicted a GDP growth rate of 2.4%, and although there was a decline from the previous year’s growth rate of 3.4%, the economy is still expanding above the non-inflationary growth rate of 1.8% that central bank officials consider sustainable.
Inflation has been on the rise, which suggests that the Federal Reserve will likely not cut interest rates before September. However, job gains in the first quarter averaged 276,000 per month, an improvement from the previous quarter’s average of 212,000 and consumer spending is still supporting growth primarily.
The International Monetary Fund has recently revised its forecast for U.S. growth in 2023 to 2.7%, up from the earlier projection of 2.1%. This is due to stronger-than-expected employment numbers and consumer spending. The U.S. economy continues to perform well despite fears following the Federal Reserve’s aggressive rate hikes to combat inflation and it is outpacing other advanced economies with consumers taking advantage of lower mortgage rates and businesses refinancing debt before interest rates rise further
