US Economic Growth Slows Down Massively, Well Below Expectations

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Daily Caller

The U.S. economy grew at a rate of 1.6% in the first quarter of 2024, according to gross domestic product (GDP) statistics released by the Bureau of Economic Analysis (BEA) on Thursday.

Slower growth in the first quarter follows above-trend growth in the third and fourth quarters of 2023, which measured 4.9% and 3.4%, respectively, according to the BEA. Economists expected that GDP growth would be around 2.2% in the first quarter, in line with typical U.S. economic growth rates.

 

High rates of growth at the end of 2023 have worried analysts about a possible “no-landing” scenario, where the economy remains hot with an elevated rate of inflation and substantial gains in GDP. Prices increased at a rate of 3.5% year-over-year in March, far faster than the Federal Reserve’s target range of 2%, and have not declined below 3% since peaking at 9% in June 2022.

The Fed has set its federal funds rate to a range of 5.25% and 5.50%, the highest range in 23 years, in an attempt to cool the economy, which would slow growth and bring inflation down. An increase in the federal funds rate has raised the cost of credit throughout the economy, disincentivizing spending and investment.