US GDP growth slows for second straight quarter in Q1

The US economy grew at an annualized rate of 1.6% in the first quarter of 2024, a preliminary estimate showed, compared with a 3.4% growth in the preceding three months.

The latest figure came well short of market consensus of 2.5% and marked growth deceleration for the second straight quarter.

It has also been the slowest growth rate since the contractions in the first half of 2022.

In the latest quarter, consumer spending slowed (up 2.5% YoY versus 3.3% YoY in Q4 of 2023), mostly because of lower goods consumption (-0.4% YoY versus +3% YoY in Q4).

However, spending on services accelerated in Q1 (up 4% YoY versus 3.4% YoY in Q4 of 2023).

Non-residential investment also slowed (up 2.9% YoY versus 3.7% YoY in Q4), while investment in equipment rebounded (2.1% YoY versus 1.1% YoY drop in Q4).

Investment in intellectual property products picked up (5.4% YoY versus 4.3% YoY in Q4).

Meanwhile, government spending slowed considerably in Q1 (up 1.2% YoY versus 4.6% YoY in Q4), the data showed.

Private inventories subtracted 0.35 percentage points from GDP growth in Q1, compared with 0.47 pp subtracted in the prior quarter.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was last inching up 0.08% to 105.908 on Thursday.

The index was attempting a rebound from a two-week low of 105.508, which it registered earlier in the session.