GDP growth slowed to a 1.6% rate in first quarter, well below expectations

[gwg77]

BIDEN BOOM!

U.S. economic growth was much weaker than expected to start the year, and prices rose at a faster pace, the Commerce Department reported Thursday.

Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6% annualized pace when adjusted for seasonality and inflation, according to the department’s Bureau of Economic Analysis.

Economists surveyed by Dow Jones had been looking for an increase of 2.4% following a 3.4% gain in the fourth quarter of 2023 and 4.9% in the previous period.

Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted. Net exports subtracted 0.86 percentage points from the growth rate while consumer spending contributed 1.68 percentage points.

There was some bad news on the inflation front as well.

The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year and up from 1.8% in the fourth quarter. Excluding food and energy, core PCE prices rose at a 3.7% rate, both well above the Fed’s 2% target. Central bank officials tend to focus on core inflation as a stronger indicator of long-term trends.

The price index for GDP, sometimes called the “chain-weighted” level, increased at a 3.1% rate, compared to the Dow Jones estimate for a 3% increase.

Markets slumped following the news, with futures tied to the Dow Jones Industrial Average off more than 400 points. Treasury yields moved higher, with the benchmark 10-year note most recently at 4.69%.

“This was a worst of both worlds report – slower than expected growth, higher than expected inflation,” said David Donabedian, chief investment officer of CIBC Private Wealth US. “We are not far from all rate cuts being backed out of investor expectations. It forces [Fed Chair Jerome] Powell into a hawkish tone for next week’s [Federal Open Market Committee] meeting.”

The report comes with markets on edge about the state of monetary policy and when the Federal Reserve will start cutting its benchmark interest rate. The federal funds rate, which sets what banks charge each other for overnight lending, is in a targeted range between 5.25% to 5.5%, the highest in some 23 years though the central bank has not hiked since July 2023.

Investors have had to adjust their view of when the Fed will start easing as inflation has remained elevated. The view as expressed through futures trading is that rate reductions will begin in September, with the Fed likely to cut just one or two times this year. Futures pricing also shifted after the GDP release, with traders now pointing to just one cut in 2024, according to CME Group calculations.

“The economy will likely decelerate further in the following quarters as consumers are likely near the end of their spending splurge,” said Jeffrey Roach, chief economist at LPL Financial. “Savings rates are falling as sticky inflation puts greater pressure on the consumer. We should expect inflation will ease throughout this year as aggregate demand slows, although the path to the Fed’s 2% target still looks a long ways off.”

Consumers generally have kept up with inflation since it began spiking, though rising inflation has eaten into pay increases. The personal savings rate decelerated in the first quarter to 3.6% from 4% in the fourth quarter. Income adjusted for taxes and inflation rose 1.1% for the period, down from 2%.

Spending patterns also shifted in the quarter. Spending on goods declined 0.4%, in large part to a 1.2% slide in bigger-ticket purchases for long-lasting items classified as durable goods. Services spending increased 4%, its highest quarterly level since the third quarter of 2021.

A buoyant labor market has helped underpin the economy. The Labor Department reported Thursday that initial jobless claims totaled 207,000 for the week of April 20, down 5,000 and below the 215,000 estimate.

In a possible positive sign for the housing market, residential investment surged 13.9%, its largest increase since the fourth quarter of 2020.

Thursday’s release was the first of three tabulations the BEA does for GDP. First-quarter readings can be subject to substantial revisions — in 2023, the initial Q1 reading was an increase of just 1.1%, which ultimately was taken up to 2.2%.

https://www.cnbc.com/2024/04/25/gdp-...cent-rate.html

[BullittEV]

Trumps fault, right?

[ezmac31]

Bigly booming

[JayJ350]

Biden ba ba ba BOOM baby!

[ispy]

don't know who to believe. need ectocanuck and his charts for comparison

[dabbmw2002]

At least we didn't just give a hundred billion dollars away.

[nutsy54]

Yet another NON-Boom™... measly 1.6% GDP growth 1st quarter 2024. Steadily declining...



https://www.barrons.com/livecoverage...quarter-report

[yabbayabba]

The "Biden Boom" is the bottom of the economy falling out?

[nutsy54]

The "Biden Boom" is the bottom of the economy falling out?

While inflation is rising...

[BeachPro11]

Only thing holding the economy up is the illegals. It creates a false sense of housing demand and job demand.

[SillieBazzillie]

GDP has exploded the last year. The Fed finally slowed it down some.

Watch out Q2 boyos

[goody1]

GDP has exploded the last year. The Fed finally slowed it down some.

Watch out Q2 boyos

Anyone speak cultist?

[JayJ350]

Anyone speak cultist?

[6gorillion]

GDP has exploded the last year. The Fed finally slowed it down some.

Watch out Q2 boyos

lol delusional cultist

[AlfBundy]

GDP growth eh? Can't remember the last time I saw any of that go in my pocket

[EctoCanuck]

[6gorillion]

wow didn't know record high layoffs on pace with 08/09 was an "improving" economy. Lmao cultist.

[BespokenBrah]

The jews that hoarded all our wealth, can start with their spending, to prop up the GDP.

[FelixTheCat1919]

Funny how Biden has been telling us the economy is great for 3.5 years when reality constantly tells us otherwise

[nutsy54]

GDP has exploded the last year. The Fed finally slowed it down some.

Watch out Q2 boyos

Holy hell, you look at the data (Post #7), then flat-out LIE to prop up the failed Biden agenda

GDP is DECLINING. What possibly makes you think there will be some magic turnaround?

[nutsy54]

{Fake meme about jobs up, stocks up, when the exact opposite is happening}

Damn, you are dumber than a rock. Just keep lying to prop up the failed Biden agenda.

Unemployment has been increasing for over a year:


Stock market is down in recent weeks:

[ParsleyTea]

Read yesterdayJamie Dimon theorizing that we could be heading into a 70s type stagflation period, which is low growth and high inflation. You have to think the possibility is there.

Saw this morning we are to receive another inflation report. Hope the inflation number comes in good, but with the way things are going of late I'm doubting it will. Interest rates are likely to remain higher for longer. Biden's guidance of the economy has been poor.

[freeheeler]

Damn, you are dumber than a rock. Just keep lying to prop up the failed Biden agenda.

Unemployment has been increasing for over a year:


Stock market is down in recent weeks:

Stock market is down???? According to sillie and ecto it’s booming right now. Just depends what way you look at it

[fitnessislife]

Goodness, the left can't meme.

Oh, and still waiting on that Biden BOOM. Any day now, right?

[ToPHeR35]

Phones been quiet lately. Usually a ton of cold calls to start the construction season by now...just all govt projects going

[Procta]

umm this is wrong

a TDS fueled Canadian told me it booming

[SillieBazzillie]

The last two quarters were 3.3% and 4.9% and you cultist are complaining about 1.6% for a single quarter?

Your master never came close to 4.9% and he hit 3.3% just once during what you idiots called "the greatest economy ever."

Freaking LMFAO at you morons...SMH

[AlfBundy]

The last two quarters were 3.3% and 4.9% and you cultist are complaining about 1.6% for a single quarter?

Your master never came close to 4.9% and he hit 3.3% just once during what you idiots called "the greatest economy ever."

Freaking LMFAO at you morons...SMH

Key Fed inflation measure rose 2.8% in March from a year ago, more than expected

https://www.cnbc.com/2024/04/26/pce-...t8percent.html

Thanks Biden

[Stizzel]

Inflation up, gdp down, full time jobs for americans switching to part time jobs for immigrants and when the public looks to the white house for a fix they see dems saying the economy has never been better

[fitnessislife]

The last two quarters were 3.3% and 4.9% and you cultist are complaining about 1.6% for a single quarter?

Your master never came close to 4.9% and he hit 3.3% just once during what you idiots called "the greatest economy ever."

Freaking LMFAO at you morons...SMH

Cultist cultist cultist cultist lol