U.S. economic growth slowed to its lowest mark this past quarter since the spring of 2022, trailing consensus forecasts and dampening hopes for Federal interest rate cuts amid persistent inflation and softened industrial demand.

The U.S. Bureau of Economic Analysis shared an advance report April 25 showing the nation’s real gross domestic product grew at an annualized rate of 1.6% in 2024’s first quarter. That’s down from 4Q23’s 3.4% and 3Q23’s 4.9%, and fell well short of forecasts of 2.4% and 2.5% from economists surveyed by Bloomberg and Reuters, and the International Monetary Fund’s 2.7% forecast.

Real U.S. GDP Growth Since 2Q21

source: tradingeconomics.com

The 1Q GDP estimate will be revised in a second report issued May 30.

The BEA said the 1Q real GDP gain primarily reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment and state and local government spending that were partially offset by a decrease in private inventory investment, while imports increased.

Compared to 4Q23, 1Q24’s deceleration in real GDP growth primarily reflected slowdowns in consumer spending, exports and state and local government spending and a downturn in federal government spending, the BEA followed. Those movements were partially offset by an acceleration in residential fixed investment, while imports accelerated.