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US economy: GDP growth slows to 1.6% in first quarter

April 25, 2024

The US growth rate was substantially lower than the 2.4% widely predicted by analysts. The fall in the growth rate comes alongside declining consumer spending and exports.

The floor of the New York stock exchange
The lower than predicted growth comes alongside declining consumer spending and exportsImage: Craig Ruttle/AP/dpa/picture alliance

The US economy grew less than anticipated in the first quarter of 2024, the Commerce Department said on Thursday.

The US' economic performance is likely to be a major campaign issue as President Joe Biden seeks re-election in November in a rematch against his presumptive Republican challenger, former President Donald Trump.

What do we know about the US growth rate?

The US registered 1.6% GDP growth in the first three months of the year, according to the data. This was substantially lower than the rate of 2.4% predicted by analysts.

The growth rate for the previous quarter was 3.4%.

The fall in the growth rate comes alongside declining consumer spending and exports.

The Commerce Department also cited a downturn in state, federal and local spending as a factor in the decline in growth.

Although the inflation rate has dropped significantly, down to 3.5% compared to a rate of 9.1% in 2022, prices remain above levels from before the start of the COVID-19 pandemic, which slowed consumption and disrupted global supply chains.

Container ship at Long Beach port, California
The US' growth rate has declined in part due to a drop in exportsImage: H. Blossey/blickwinkel/picture alliance

US ahead of other industrialized states

While the US has seen lagging growth rates, its economic outlook has remained ahead of that of other major industrialized economies.

The International Monetary Fund (IMF) has predicted that the US economy will grow 2.7% for all of 2024, up 0.2 percentage points compared to last year.

This is also more than double the growth the IMF expects for the other six states in the G7 group of industrialized countries.

While Europe's largest economy has seen mildly improving indicators, including increasing consumer confidence due to wage hikes, Germany's government maintains a growth outlook of just 0.3%.

Most of the currencies of the G20 group of major economies have depreciated against the US dollar this year.

sdi/wmr (AP, AFP)