The U.S. economy grew at a slow pace in the first quarter of the year, according to a report released by the government on Thursday. This was lower than initially estimated, showing that consumer spending increased but at a slower pace than previously thought. The slowdown in GDP growth was particularly evident in the decrease in business inventories and increase in imports, which subtracted more than 1 percentage point from last quarter’s growth.
Despite concerns about rising interest rates causing a recession, the U.S. economy has shown resilience and continued to grow while employers have continued to hire new workers. Consumer spending, which drives about 70% of economic growth, grew at a rate of 2% annually, down from the initial estimate of 2.5%. Spending on goods like appliances and furniture fell at a 1.9% annual pace, the largest quarterly drop since 2021. However, spending on services increased at a healthy rate of 3.9%, the highest since mid-2021.
