Economic growth in the US was faster than expected in the first quarter
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The report by the Department of Commerce showed that Americans spent more on services and less on goods during the first months of the year
According to the report presented this Thursday by the Department of Commerce, economic growth in the United States was faster than expected for the first quarter of the year.
In the first quarter, gross domestic product (GDP), the broadest measure of economic output, showed signs of rising with an annualized rate increase of 2%, coming in above expectations, according to the analysis. from many analysts.
According to the Department of Commerce, the data showed that Americans spent more on services and less on goods during the first months of the year, because since last year the prices of basic services skyrocketed due to inflation. Health care spending was also part of the measures.
The final GDP estimates
As for final GDP estimates, the report indicated that due to the resilience of consumers in the last few months, the US economy was in much better shape than expected, however the boost given by consumption was slowing down according to analysts.
For Ernst & Young, Gregory Daco “While consumers continue to spend, they are exercising more discretion as persistent inflation and the Federal Reserve tightening cycle take their toll. We still believe that a recession is more likely than not, but we have cut our recession odds to 55%, and if it were to materialize, it would have unique characteristics,” he said.
Action by The Federal Reserve
The Federal Reserve has raised interest rates tenfold to control inflation and bring it to its 2% target; However, this strategy has weighed on the job market, purchasing power and lending standards that have tightened in recent months. So US consumers have been facing a really challenging economic landscape since last year.