USA: It is clear that the economy is losing momentum at the beginning of the year

Washington – The US economy recorded weaker growth at the beginning of the year than previously expected. In the first quarter, gross domestic product rose 1.3% quarter-on-quarter, year-over-year, the Commerce Department announced Thursday in Washington. The previous estimate was revised down by 0.3 percentage points. In the last quarter of 2023, the world's largest economy grew significantly by 3.4 percent.

The Ministry attributes the weak growth at the beginning of the year to the decrease in private and public household spending and the decrease in exports. On the other hand, construction spending accelerated.

An economic slowdown may mean a somewhat more flexible stance on monetary policy by the US Federal Reserve. Monetary authorities are still reluctant to ease their hawkish stance, due to the slowdown in inflation. However, if the economy weakens, inflation will likely fall further. This may give the Fed room to cut interest rates in the future.

For now, markets have fully priced in this year's key rate cuts. At the beginning of the year there were still up to six steps.

US growth figures are estimated on an annual basis, that is, they are extrapolated over the course of the year. It indicates how much the economy will grow if the pace continues for a year. This method is not used in Europe, which is why the numbers cannot be compared directly. To get a similar growth rate to Europe, you would have to divide the US rate by four. (op/mk/ps)