U.S. Economy Grows at 1.6% in First Quarter of 2024, Boosted by Consumer Spending and Investments

Published / Modified Apr 25 2024
Source: U.S. Bureau of Economic Analysis, CSIMarket Team / CSIMarket.com

The U.S. economy experienced a solid growth rate of 1.6% in the first quarter of 2024, according to the advance estimate released by the Commerce Department.
This expansion was primarily driven by increased consumer spending and growth in investments, signaling a promising path for the self-sustainability of the economy.

The Gross Domestic Product (GDP) for the first quarter reached $28,285 billion on a seasonally adjusted basis, a notable increase from $27,957 billion in the previous quarter.
Consumer spending and investments made significant positive contributions to this growth, further reinforcing the overall economic expansion.

This broad-based growth suggests that the U.S. economy is on the right track towards sustained progress.
It is important to note that the initial estimate of GDP will undergo two revisions before finalization, and the current report includes estimates for trade and inventory growth.
Over the past 12 months, the U.S. Gross National Product has grown by 3.0%.
It is worth mentioning that the U.S. growth rate would have been even higher if it had not been for a sharp increase in imports, which negatively affect GDP.
Imports rose by 7.20% in the first quarter, compared to 2.20% in the previous quarter.

Consumer spending and investments played a crucial role in driving the growth seen in the first quarter.
Government spending at all levels increased by 1.20%. On a seasonally adjusted basis, investments grew by 3.20% to reach $5,007 billion.
Housing investments experienced a significant growth rate of 13.90%, contributing by 0.04 percentage points to the overall GDP.
Additionally, business fixed investments rose by 2.10%, adding 0.17 percentage points to the growth.

However, the slower buildup of inventories acted as a major drag on the economy, subtracting 0.31 percentage points from GDP growth.
Despite some slowdown, real consumer spending increased at an estimated annualized rate of 2.5% in the first quarter.
It remained a significant contributor to the overall U.S. growth, adding 1.7 percentage points to the GDP.

Consumer spending accounted for 68.65% of economic activity, totaling approximately $19,192 billion on a seasonally adjusted basis in the previous quarter.
Looking at final sales, which exclude inventory behavior, there was a 2.0% gain in the first quarter, following a 3.9% gain in the previous quarter.

In conclusion, the U.S. economy experienced growth of 1.6% in the first quarter of 2024, driven by increased consumer spending and a surge in investments.
Although imports posed a challenge, overall economic indicators suggest positive momentum.
Further revisions and analysis will provide a clearer picture of the nation's economic performance.


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