US GDP growth slows, spending and inflation both decline

On May 30, data released on Thursday showed that the annualized quarterly revision of the real GDP in the US Quarter 1 recorded 1.3%, lower than the previous preliminary value of 1.6%, reflecting lower than expected consumer spending. Personal spending, the main growth engine of the US economy, rose by 2.0%, compared with the previous preliminary value of 2.5%. On inflation, the Federal Reserve's preferred quarterly annualized revision of the US Quarter 1 PCE price index recorded 3.3%, slightly lower than the original estimate (3.4%). Excluding food and energy, the annualized quarterly revision of the US Quarter 1 core PCE price index recorded 3.6%, also lower than the previous estimate of 3.7%. Today's numbers highlight how the US economy is losing steam starting in 2024 after continuing unexpected gains in 2023. High interest rates, dwindling savings during the pandemic and slowing income growth are some of the key factors affecting US households and businesses.