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The US economy is already showing signs of slowdown due to the Fed’s rate hike

Date: June 5, 2023 Time: 07:02:01

The US economy cools. The Gross Domestic Product (GDP) of this power has moderated to 1.3% during the first quarter of the year, although it beat analysts’ forecasts, which predict 1.1%, in line with the first reading. As published this Thursday by the Bureau of Economic Analysis of the Department of Commerce (BEA, for its acronym in English), it is the third consecutive upward data after the economy contracted in the first part of 2022.

Without annualizing, the data rose to 0.3%, three tenths below that registered in the last three months of 2022, when the expansion of the largest world economy had been 0.6%. Real GDP growth between January and March reflected increases in consumer spending, exports, government spending, and nonresidential fixed investment that were partly offset by declines in private investment in inventories and investment social fixed residence.

However, compared to the fourth, the slowdown in real GDP observed in the first quarter mainly reflected a decline in private investment in inventories and a slowdown in nonresidential fixed investment. These moves were partly offset by an acceleration in consumer spending, a rebound in exports, and a smaller decline in residential fixed investment. Specifically, consumer spending in the first quarter experienced an annualized increase of 3.8%, compared to 1% in the previous quarter, while government spending increased 5.2%, compared to 3.8% in the fourth quarter.

Despite the slowdown at the start of 2023, including the effect of the Reserve’s 1% interest rate hikes in the first quarter and that this expansion could be reduced, after Germany has revised its data downwards to -0.3% from predicted stagnation.

As for the personal consumption expenditure (PCE) price index, the statistic chosen by the Federal Reserve (Fed) to monitor inflation, it grew 4.2% in the quarter, five tenths more than in the previous measurement and in line with the initial estimate. However, the Core Index, Which Excludes Its Calculation The Prices Of Food And Energy Due To ITS HIGHER VOLATITY, Closed The Quarter With AN INCREASE OF %, one tenth more than previously estimated and six tenths more than the previous quarter.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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