Economic growth in decline now – high inflation and interest rates

The U.S. economy grew slower than previously expected in Q1 2024 as inflation re-accelerated and consumers dialed back their spending on durable goods. According to the product for the first quarter of 2024, the economy grew at an annualized rate of 1.3 percent during the period, a downward revision from the previous estimate of 1.6 percent, which had already undercut expectations. According to the BEA, the slowdown compared to Q4 2023, when real GDP increased had 3.4 percent, primarily reflected decelerations in consumer spending, exports and government spending as well as an increase in imports, which are a subtraction in the calculation of GDP. The downward revision compared to the advance estimate primarily reflects a stronger-than-expected deceleration in consumer spending, which was driven by a modest decline in spending on nondurable goods and a significant decline in durable goods spending, likely caused by sticky inflation and high interest rates.