The U.S. GDP growth reached 1.1% in the first quarter of this year, lower than market expectations. Analysts say that the U.S. Federal Reserve’s high-intensity austerity measures have affected the slowdown in growth.
The U.S. Department of Commerce said on the 27th (local time) that the real GDP growth rate in the first quarter of this year (January to March) was 1.1% per year.
This is down from 2.6% in the fourth quarter of last year and far below the expert forecast of 2.0% compiled by Dow Jones.
Although the U.S. economy continued to grow positively for three consecutive quarters, analysts say that growth slowed down as the growth rate fell compared to the fourth quarter of last year.
The U.S. economy, which had been in a recession after negative growth for the first and second quarters of last year, rebounded as it shifted to positive growth from the third quarter of last year.
The U.S. Commerce Department explained, “Compared to the fourth quarter, the decline in real GDP in the first quarter mainly reflected a slowdown in private inventory investment and a slowdown in non-residential fixed investment.”
In particular, analysts say that the U.S. Fed’s nine consecutive hikes in the benchmark interest rate to curb inflation, which soared to 9.1 percent in June last year, are affecting the economic situation.
Last quarter, Americans’ consumption spending increased 3.7 percent from the previous quarter, largely attributable to positive growth, but consumers’ spending at the end of the quarter has been on the decline, raising concerns about an economic slowdown.
As a result, there are growing concerns that the U.S. economy could stagnate at the end of this year or next year. Reuters analyzed, “The U.S. economy is maintained on the back of strong consumer spending, but growth will eventually slow in the aftermath of the rate hike.”
Ryan Sweet of Oxford Economics predicted to AFP that “the recent instability in the banking system and stricter lending standards are expected to cause a more serious economic downturn than expected in the second quarter.”
The figures released on the same day are breaking news and can be revised in the future. The U.S. growth rate will be announced three times: breaking news, provisional, and definitive. The second estimate of U.S. first-quarter GDP is scheduled to be released on the 25th of next month.
