Slower-Than-Predicted GDP Growth in Q1 2024: What You Need to Know

In the first quarter of 2024, the U.S. economy experienced slower growth compared to the previous 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.

Despite a growth rate of 1.6%, which is lower than the expected 2.5%, some key highlights of Q1 2024 GDP include a decline in inflation rates. The Core Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred inflation gauge, slowed from 3.4% in Q4 2023 to 3.7% in Q1 2023, exceeding the expected 2%.

Real consumer spending growth also slowed from 3.5% to 2.5%, falling short of the expected 2.8%. Market reactions to the GDP print included a slight increase in the U.S. dollar index and a rise in Treasury yields, with the 2-year yield reaching 4.95% as traders adjusted their expectations for Fed rate cuts due to higher-than-expected inflation figures