Despite the slowdown in U.S. economic growth in the first quarter, experts believe that the Federal Reserve will not lower interest rates before September due to an increase in inflation. The Commerce Department’s Bureau of Economic Analysis reported that gross domestic product grew at a 1.6% annualized rate, with consumer spending being the primary driver. Although this was below the forecasted rate of 2.4%, it was still above the non-inflationary growth rate of 1.8%.
Recent data from the International Monetary Fund indicates that U.S. growth is projected to be 2.7% in 2024, up from the previously forecasted 2.1%. This adjustment was due to stronger-than-expected employment and consumer spending, as well as job gains in the first quarter averaging 276,000 per month compared to the previous quarter’s average of 212,000. Despite concerns about a slowdown following the Fed’s rate hikes, the U.S. economy continues to outperform other advanced economies thanks to consumers taking advantage of lower mortgage rates and businesses refinancing debt before the tightening cycle began.
In summary, although U.S. economic growth has slowed down in Q1, experts believe that there are several factors working in favor of a positive outlook for