The US economy grew much less than economists expected in the first quarter. Companies, among others, have been more cautious and have invested less. At the same time, consumer spending has increased dramatically, in part because more cars have been bought. During the quarter, US households spent less money.
Growth in the US economy was 1.1 percent, compared with 2.6 percent in the last three months of last year. Economists generally expected US economic growth to be 1.9%.
Accrued interest
The declining growth could be the result of the sharp rise in interest rates in the United States. A further hike from the Fed is expected as inflation is still high. But the cooling of the economy could lead central bankers to caution. At the same time, an inflation rate closely monitored by Federal Reserve policymakers has risen faster than late last year and even faster than expected.
The 1.1% increase is an annualized figure. This means that quarter-over-quarter growth is stretched artificially as if it had remained at that level for a full year. According to the method used in Europe, growth in the United States in the first quarter would have been 0.3%.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
