The Bureau of Economic Analysis has released its second estimate, showing that the US economy grew at a slower pace in the first quarter than initially reported. The revised annualized growth rate is 1.3%, lower than the first reading of 1.6% and in line with economist expectations. The primary reason for this downward revision was a decrease in consumer spending, which grew at 2% instead of the previously reported 2.5%.
Compared to the fourth quarter, GDP was revised up to 3.4%, but the first quarter’s growth was still significantly lower. This slowdown in growth comes at a time when concerns about inflation have been heightened as hot economic growth could lead to increased prices. Many experts do not view this slowdown as a sign of a broader trend and forecast stronger growth in the second quarter.
Goldman Sachs anticipates 3.2% annualized growth in the second quarter, while the Atlanta Fed’s GDPNow forecaster is projecting 3.5% growth. Bank of America’s US economist does not see the downward revision to first-quarter GDP as a cause for concern, stating that the economy remains on stable footing overall. Despite the initial slowdown, the outlook for economic growth moving forward remains positive.
Josh Schafer, a reporter for Yahoo Finance, provides in-depth analysis of stock market news and events impacting stock prices. For more financial and business news, visit Yahoo Finance