GDP growth slows in first quarter

Well, this muddies the picture a bit: Economic growth eased in the first three months of 2023, driven down by some more volatile sectors of the economy, according to the latest Commerce Department data.

Real GDP grew 1.6% in Q1, down from a 3.4% increase in Q4 2023, the department’s Bureau of Economic Analysis revealed Thursday. Consumer spending, real estate and intellectual property investment, and state and local government spending contributed to the growth, but were partially offset by a decrease in private inventory investment and an increase in imports.

GDP growth lagged behind economists’ expectations of a 2.4% bump according to the Wall Street Journal. However, the offsetting forces—weaker international trade and inventory volumes—are more volatile and “don’t reflect the economy’s fundamental health,” USA Today reported.

“It would suggest some moderation in growth but still a solid economy,” Michael Gapen, Bank of America’s chief US economist, told the New York Times.

Consumers spent more on services, especially healthcare and financial services, but less on goods such as vehicles and gasoline, according to the Commerce Department. The state and local government spending boost was due to increased compensation of government employees. Inventory investment fell mainly due to “decreases in wholesale trade and manufacturing.” Imports increased for both goods and services.