Economic growth increased at a slower pace than expected during the first quarter of 2024, rising 1.6% after rising a revised 3.4% during the fourth quarter of 2023, according to CNBC. Economists had been expecting growth of 2.4%.
Fixed investment and government spending at the state and local level helped keep GDP positive during the first quarter, while a decline in private inventory investment and an increase in imports slowed growth.
Consumer spending increased 2.5% and accounted for 1.68 percentage points of the total gross domestic product increase. Net exports subtracted 0.86 percentage points from the growth rate.
The personal consumption expenditures price index—a key inflation variable for the Federal Reserve—rose at a 3.4% annualized pace for the first quarter—its biggest gain in a year and up from 1.8% in the fourth quarter of 2023.
