The U.S. economy experienced slower growth in the first quarter of 2024 compared to the final quarter of 2023 and below what economists had predicted. The Gross Domestic Product (GDP) grew at an annualized rate of 1.6% in the first quarter, according to advanced estimates from the Bureau of Economic Analysis released on Thursday.
In the first quarter, consumer spending growth slowed down to 2.5%, which is lower than what was expected, and falls short of the 3.5% growth recorded in the previous quarter. This indicates that consumers are not as optimistic about their financial situation as they were before, which could lead to a slowdown in economic growth in the future.
The Core Personal Consumption Expenditure (PCE) price index also slowed down from its previous rate of 3.4% to 3.7%. This suggests that inflation is not as high as it was before, but it still exceeds the expected rate of 2%. As a result, gold prices went up by 0.5%, indicating that investors are still concerned about inflation and are looking for safe-haven assets to invest in.
In premarket trading on Thursday, futures on major U.S. indices were down due to weak revenue guidance from tech giant Meta Platforms Inc., which fell by 15%. Despite this, Meta’s better-than-expected first quarter results did little to lift market sentiment.
Overall, the slowdown in economic growth during the first quarter of 2024 raises concerns about whether this trend will continue throughout the year or if there will be a rebound in economic activity later on.
