{"id":5310,"date":"2024-04-26T07:20:52","date_gmt":"2024-04-26T07:20:52","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/26\/u-s-economic-growth-slows-to-1-6-inflation-stays-firm\/"},"modified":"2024-04-26T07:20:52","modified_gmt":"2024-04-26T07:20:52","slug":"u-s-economic-growth-slows-to-1-6-inflation-stays-firm","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/26\/u-s-economic-growth-slows-to-1-6-inflation-stays-firm\/","title":{"rendered":"U.S. Economic Growth Slows to 1.6%, Inflation Stays Firm"},"content":{"rendered":"

<\/a><\/p>\n

Emily Elconin\/Bloomberg via Getty Images<\/p>\n

<\/p>\n

The U.S. economy continued growing in the first quarter, albeit at a slower pace, but stubbornly high inflation continues to dash investors\u2019 hopes that the Federal Reserve will begin slashing interest rates in the coming months.<\/p>\n

Gross domestic product<\/a> expanded at a 1.6% seasonally- and inflation-adjusted annual rate in the first quarter, the Commerce Department said Thursday, a pullback from last year\u2019s quick pace. That lagged behind the 2.4% projected by economists polled by The Wall Street Journal.<\/p>\n

Despite the continued growth, investors zeroed in on hotter-than-expected inflation data that provided the latest evidence that Americans face stiff price pressures across the economy.<\/p>\n

The continued inflation sparked a selloff in bonds, sending yields on the 10-year Treasury note above 4.7% for the first time this year. U.S. stocks fell, meanwhile, with the Dow Jones Industrial Average sliding more than 600 points in morning trading.<\/p>\n

The report did show, however, that American consumers are still strong after years of hiring and wage growth. Spending on healthcare, insurance and other services continued to grow, the Commerce Department said. Measures of underlying demand remain robust.<\/p>\n

\u201cThe domestic economy is doing well,\u201d said Eugenio Alem\u00e1n, chief economist at investment firm Raymond James. \u201cPrices were a little bit over the top, but not by much.\u201d<\/p>\n

A slowdown in spending on goods such as cars and gasoline, weighed down overall growth. Shifts in business inventories and international trade also slowed last quarter\u2019s expansion, but economists cautioned that those figures can vary widely throughout the year.<\/p>\n

\u201cA decrease in inventories can be really good news for the economy,\u201d said Teresa Ghilarducci, an economics professor at the New School for Social Research in New York City. \u201cThat bodes well for a spurt of investment next quarter.\u201d<\/p>\n

\u201cIt\u2019s way too soon to mourn for the economy,\u201d she added.<\/p>\n

But Thursday\u2019s report also suggests inflation, using the Fed\u2019s preferred gauge, was likely firmer than expected in March\u2014and economists had already revised up their expectations for price pressures in March after\u00a0a separate inflation report<\/a>\u00a0earlier this month.<\/p>\n

Excluding volatile food and energy prices, the personal-consumption expenditures price index rose 3.7% in the first quarter at an annualized rate, which was above expectations of a 3.4% increase.<\/p>\n

The increase implies that price pressures were stiff again in March and that brisk\u00a0inflation readings<\/a>\u00a0for January and February may get revised higher when the Commerce Department releases its March inflation figures on Friday.<\/p>\n

Thursday\u2019s snapshot comes after a string of federal data in recent weeks suggested that\u00a0the American economy keeps powering through<\/a>\u00a0the highest interest rates in 23 years.<\/p>\n

So far in 2024, employers around the country have added staff at rates outpacing Wall Street\u2019s projections. An influx of immigrants is\u00a0boosting growth<\/a> and tax revenues, economists say, even as it strains some governments\u2019 resources. Credit card companies have recently reported that customers are spending more than they did last year.<\/p>\n

That has translated to optimism for many businesses as earnings season kicked into high gear this week. GM\u00a0upgraded its profit guidance<\/a>\u00a0after strong demand for gas-powered trucks and sport-utility vehicles propelled year-over-year growth in first-quarter retail sales.\u00a0Lockheed Martin\u00a0said it is\u00a0cranking out<\/a>\u00a0new missiles, air-defense systems and space hardware in part to fill a backlog from wars in Ukraine and the Middle East.<\/p>\n

Some industries have also continued to shell out for data centers, factories and other capital-intensive projects around the country despite higher borrowing costs. Earlier this week, steel producer\u00a0Nucor\u00a0said that it would boost such spending this year with investments in mills in West Virginia and North Carolina.<\/p>\n

\u201cOn a macro level, the U.S. economy appears to demonstrate near-term resilience,\u201d Chief Financial Officer\u00a0Steve Laxton\u00a0told analysts.<\/p>\n

But the continuing growth has also contributed to persistent price pressures that have\u00a0raised the prospect<\/a>\u00a0that inflation might settle closer to 3% than the Federal Reserve\u2019s 2% goal.<\/p>\n

Plateauing inflation in recent months has exacerbated\u00a0a knotty election-year issue<\/a>\u00a0for President Biden despite a promising economic outlook. At the same time, investors\u2019 rate-cut expectations have been upended, slamming the artificial-intelligence-oriented tech stocks that propelled a market rally in recent months.<\/p>\n

There are once again signs, though, that the economy is cooling. Low-income Americans are saving far less than they did prepandemic. Mortgage rates recently\u00a0bounced back above 7%,<\/a>\u00a0leading home sales in March to post their biggest monthly drop in more than a year. Average hourly earnings in March\u00a0rose at their slowest annual pace<\/a>\u00a0since June 2021.<\/p>\n

Many economists still believe that those cracks will widen\u2014slowing inflation\u2014if and when the labor market loosens.<\/p>\n

Nick Timiraos contributed to this article.<\/em><\/p>\n

The post U.S. Economic Growth Slows to 1.6%, Inflation Stays Firm<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Emily Elconin\/Bloomberg via Getty Images The U.S. economy continued growing in the first quarter, albeit at a slower pace, but stubbornly high inflation continues to dash investors\u2019 hopes that the Federal Reserve will begin slashing interest rates in the coming months. Gross domestic product expanded at a 1.6% seasonally- and inflation-adjusted annual rate in the…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":5311,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5310","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=5310"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5310\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/5311"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=5310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=5310"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=5310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}