Economic Growth Slows in Q1 2024: GDP Comes in Below Forecasts and Consumer Spending Slows, Impacting U.S. Dollar and Gold Prices
The U.S. economy experienced slower growth in the first quarter of 2024 compared to the final quarter of 2023 and below what economists had predicted. According to advanced estimates from the Bureau of Economic Analysis, the Gross Domestic Product (GDP) grew at an annualized rate of 1.6% in the first quarter, which is lower than the expected 2.5%.
Some key highlights of Q1 2024 GDP include a growth rate of 1.6%, which is below the economist consensus forecast and lower than the Core Personal Consumption Expenditure (PCE) price index’s growth rate in Q4 2023, which slowed from 3.4% to 3.7%. The real consumer spending growth also slowed from 3.5% to 2.5%, falling short of expectations for Q1 2024.
Market reactions to the GDP print included a slight increase in the U.S. dollar index and a rise in Treasury yields, with traders adjusting their expectations for Fed rate cuts due to higher-than-expected inflation figures. Gold prices also went up by 0.5%. In premarket trading on Thursday, futures on major U.S. indices were down, largely due to a disappointing revenue guidance for technology giant Meta Platforms Inc., which overshadowed its better-than-expected first quarter results that beat expectations by $97 million or about $8 per share more than analysts expected.”