The Commerce Department reported that the world’s largest economy grew 1.6 percent in the first quarter. – significantly less than the 2.4 percent predicted by analysts.
This indicator was also lower than 3.4 percent. growth rate that was recorded in the last three months of the previous year.
While the latest data still shows the economy is growing, the economy could become a factor in trouble for President Joe Biden, who is hoping to be elected in November.
The slowdown in economic growth “primarily reflected lower consumer spending, export volumes, and state and local government spending,” the Commerce Department said in a statement.
In addition, “the amount of federal government spending also decreased,” the report said.
For now, consumers are still willing to spend, “although they are a bit more selective as prices go up,” said Gregory Daco, chief economist at EY.
“We forecast that the economy should gradually cool down in the future as falling demand for workers, slowing wage growth, persistent inflation and tight credit conditions will limit private sector activity,” he added.
