Economic growth slowed to 1.1% in the first quarter of this year, down from 2.6% the quarter before. Economists had expected gross domestic product growth to increase by 2%, so the preliminary report is weaker than forecast.
Economists had expected gross domestic product growth to increase by 2%, so the preliminary report is weaker than forecast. Still, details of the report indicated some resilience in the face of several major headwinds. Most notably, consumer spending accelerated to a strong 3.7% annual rate."The focus is on the weak top-line number, but the economy remains resilient, especially consumer spending," said Robert Frick, corporate economist at Navy Federal Credit Union.
The first-quarter growth came as the Federal Reserve increased its interest rate target, an action meant to slow economic activity. Still, even though Thursday’s preliminary reading was in the black, most economists expect GDP growth to fall off as the year drags on and economic conditions darken. Many, including Fed staff, are forecasting at least a mild recession later this year.The economy grew at a 2.6% annual rate from October through the end of last year. Still, household spending and business investment slowed to end the year.
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