U.S. GDP slows to 1.1% in the first quarter
2023.04.27 11:06
© Reuters.
Investing.com — U.S. economic growth slowed by more than expected in the first quarter, according to preliminary data from the Commerce Department on Thursday.
Real in the world’s largest economy increased at an annual rate of 1.1% during the January to March period, slowing from 2.6% in the final three months of 2022. Economists had predicted that the reading would come in at 2.0%.
Compared to the fourth quarter, the deceleration primarily reflected a downturn in private inventories and nonresidential fixed investment. These trends were partly offset by an uptick in consumer spending, the Commerce Department noted in a statement.
The figures come as the has aggressively hiked interest rates over the past year in an attempt to cool red-hot .
Next week, the Fed is forecast to raise borrowing costs by another 25 basis points, which would bring the all-important federal funds target to a range of 5% to 5.25%. Officials may be mulling over a subsequent pause in the tightening cycle to give themselves time to examine the impact of last month’s turmoil in the financial services sector.
A sharp dip in shares of regional lender First Republic (NYSE:) has stoked fresh worries that the banking tumult may only be in remission, and not yet completely finished. On Wednesday, First Republic, which reported $100 billion in customer withdrawals in March, saw its stock tumble by 29.75%, extending a series of steep declines throughout this week.
Elsewhere, the number of Americans filing for unexpectedly fell to 230,000, in a potential sign of lingering tightness in the U.S. labor market. The figure, which is down from an upwardly revised total of 246,000 in the prior week, was projected to rise marginally to 248,000. One aim of the Fed’s rate rises has been to soften job market demand in the hopes that this trend will help ease overall inflationary pressures.
The , which aims to account for volatility in the weekly data, also decreased by 4,000 to 236,000. , meanwhile, dipped to 1,858,000, but remained near their highest level since 2021.
