U.S. Economy Shows Resilience Despite Inflation Concerns, Commerce Department Reports

U.S. economy resilient with strong job market, robust consumer spending. Inflation also resilient.

In the first three months of the year, the U.S. economy demonstrated resilience, driven by a robust job market and substantial consumer spending. However, the economy also faced challenges due to persistent inflation.

Growth Slowdown

According to the Commerce Department's report released on Thursday, the gross domestic product, adjusted for inflation, expanded at a modest 1.6 percent annual rate. This growth rate marked a significant decline from the 3.4 percent recorded at the end of 2023 and fell below the expectations of analysts.

Factors Contributing to the Slowdown

Economists attributed the slowdown to considerable fluctuations in business inventories and international trade, factors that often exhibit substantial variability from one quarter to the next. Despite this, measures of underlying demand remained notably robust, dispelling concerns of an impending recession that had been predicted by forecasters throughout the preceding year.

Economist's Perspective

Michael Gapen, the chief U.S. economist at Bank of America, characterized the report as indicative of a moderation in growth but emphasized that it still reflected a strong and stable economy. He highlighted that the report contained "few signs of weakness overall."

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