The economic activity in USA did not start with the strength that was expected and between January-March showed a notable slowdown.
During the first quarter of the year, GDP had a growth of 1.6 percent at an annualized quarterly rate, below the 2.5 percent expected by the market, according to the first estimate from the Bureau of Economic Analysis (BEA).
In addition, the deceleration was from 3.4 percent at the annualized quarterly rate at the end of 2023 and was the lowest since it contracted 0.6 percent at the annualized quarterly rate in the second quarter of 2022.
“The slowdown of real GDP in the first quarter primarily reflected a slowdown in consumer spending, exports, and state and local government spending and a stagnation in federal government spending,” the BEA explained.
For example, consumption grew 2.5 percent at an annualized quarterly rate, from 3.3 percent at the end of 2023, and exports advanced 0.9 percent, from 5.1 percent.
Fixed investment accelerates in the US
The Office explained that, in contrast, there was an acceleration in residential fixed investment, whose growth was 13.9 percent, the strongest since the end of 2020.
Pantheon Macroeconomics said the slow growth in the first quarter is likely to set the tone for the rest of 2024.
“It is true that forward-looking data is often revised significantly, and part of the downward surprise relative to consensus was driven by volatile components of trade and inventories,” the financial institution noted.
For its part, Oxford Economics considered that US GDP is volatile and subject to big changes, so the weaker-than-expected advance is not worrying for the Fed.
However, the “worrying” part for the Fed is the rise in the core PCE deflatorwhich recorded an annual growth of 3.7 percent between January and March.
The data presented by the BEA correspond to the first estimate of threethe publication of the next review will be made on May 30.
