Positive Outlook: US Economy Resilient Despite Slow Growth in First Quarter

In the first quarter, the US economic growth slowed more than anticipated, but an increase in inflation suggested that the Federal Reserve would likely not lower interest rates until September. The Commerce Department’s Bureau of Economic Analysis reported that gross domestic product increased at a 1.6% annualized rate, primarily driven by consumer spending. This was below the forecasted rate of 2.4% by economists but above the non-inflationary growth rate of 1.8%.

Despite concerns of a slowdown following the Fed’s rate hikes, the US economy continues to outperform other advanced economies. The International Monetary Fund recently revised its forecast for US growth in 2024 to 2.7%, up from the 2.1% projected in January. This adjustment was due to stronger-than-expected employment and consumer spending, with job gains in the first quarter averaging 276,000 per month compared to the previous quarter’s average of 212,000.

The resilience of the US economy has been attributed to consumers taking advantage of lower mortgage rates and businesses refinancing debt before the tightening cycle began. Despite challenges such as slower-than-expected growth in the first quarter, overall outlook remains positive for the US economy.