U.S. economy grew at 1.6 percent annual rate in first quarter 2024, a sharp slowdown

[mahatmakanejeeves]

Source: Washington Post

ECONOMY
U.S. economy grew at 1.6 percent annual rate in first quarter 2024, a sharp slowdown

By Abha Bhattarai
Updated April 25, 2024 at 8:34 a.m. EDT Published April 25, 2024 at 6:00 a.m. EDT

U.S. economic growth slowed in the first three months of the year, with gross domestic product growing at an annualized rate of 1.6 percent, as consumers began gradually pulling back.

GDP was down sharply from the 3.4 percent annual rate in the last quarter of 2023, according to data released this morning by the Bureau of Economic Analysis.

Gross domestic product, the sum of all of the goods and services produced in the country, is the broadest measure of the economy.

"Growth is slowing, but clearly the economy is still on a solid path," said Ben Ayers, senior economist at Nationwide, which recently scrapped its recession forecast for the year. "We've had very strong job growth that's fueling higher incomes, giving people the money to go out and spend. But that's also kept inflation high, so honestly a little bit of cooling is good news."

{snip}

By Abha Bhattarai
Abha Bhattarai is the economics correspondent for The Washington Post. She previously covered retail for the publication. Twitter https://twitter.com/abhabhattarai

Read more: https://www.washingtonpost.com/business/2024/04/25/gdp-2024-economy-growth/

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The article "Published April 25, 2024 at 6:00 a.m. EDT" was a placeholder article, there to be edited when the BEA let the story be published.

Original title:

UPDATED THU, APR 25 2024 8:39 AM EDT
https://www.cnbc.com/2024/04/25/stock-markets-today-live-updates.html

Dow futures drop 300 points after downbeat U.S. GDP report: Live updates
Brian Evans
Lisa Kailai Han

{snip}

-- -- -- -- -- --

They don't have a lot to say right now. Give it a few minutes.

It's now 400 points down.

-- -- -- -- -- --

The economy grew a disappointing 1.6% in Q1. What does it mean for interest rates?
https://www.usatoday.com/story/money/2024/04/25/gdp-report-first-quarter/73437532007/
Published 8:36 a.m. ET April 25, 2024 Updated 8:38 a.m. ET April 25, 2024

Paul Davidson
USA TODAY

{snip}

-- -- -- -- -- --

From the source, the U.S. Bureau of Economic Analysis:

https://www.bea.gov/news/2024/gross-domestic-product-first-quarter-2024-advance-estimate

April 25, 2024
Gross Domestic Product, First Quarter 2024 (Advance Estimate)

Real gross domestic product (GDP) increased at an annual rate of 1.6 percent in the first quarter of 2024, according to the "advance" estimate. In the fourth quarter of 2023, real GDP increased 3.4 percent. The increase in the first quarter primarily reflected increases in consumer spending and housing investment that were partly offset by a decrease in inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

[Traurigkeit]

1. BREAKING: Economy grew at 1.6% annualized rate in first quarter as consumer spending slowed - Washington Post

[mahatmakanejeeves]

2. Thanks. Will use that. NT

[BumRushDaShow]

3. From Bloomberg

(CNBC doesn't usually do these as "live updates" but they decided to do so today... )

US GDP Growth Slows to 1.6% While Core Inflation Accelerates


By Molly Smith
April 25, 2024 at 8:34 AM EDT
Updated on April 25, 2024 at 8:41 AM EDT

The US economy grew last quarter at the slowest pace in two years as consumer and government spending cooled amid a sharp pickup in inflation.

Gross domestic product increased at a 1.6% annualized rate, below all economists’ forecasts, the government’s initial estimate showed.

A wider trade deficit subtracted the most from growth since 2022. The economy’s main growth engine — personal spending — rose at a slower-than-forecast 2.5% pace.

A closely watched measure of underlying inflation advanced at a greater-than-expected 3.7% clip, the first quarterly acceleration in a year, the Bureau of Economic Analysis report showed Thursday.

(snip)

https://www.bloomberg.com/news/articles/2024-04-25/us-economy-expands-at-1-6-rate-trailing-all-forecasts

[mahatmakanejeeves]

4. Yeah, CNBC was sort of goofy this morning.

They took a while to come up with an actual story.

Bloomberg generally throws up a paywall in my way.

And good morning. Big SC news today.

[IronLionZion]

5. Every criminal should be allowed to appoint their own judges

[BumRushDaShow]

6. Top 'o the day to you!

CNBC has amazingly had many "non-business" breaking political news stories so they may have diverted their crew to monitor those 2 court actions today (or something related).

Bloomberg only lets me do 5 "gift" articles a month (vs WaPo and NYT that each allow 10), so I sometimes get stingy with those.

[Traurigkeit]

8. These GOP controlled media outputs makes any good news bad for democrats.

[progree]

9. There are 2 revisions coming: one late May, and one late June.

It's always that way with the GDP reports: the first one comes out late in the month following the end of the quarter (in this case the end of the quarter was March 31 and the first report came out today, April 25).

The 2nd one comes out a month after that, and the third and final one a month after the 2nd one.

The stock market didn't get too badly clobbered, the S&P 500 down just 0.46% (it was down 1.6% at its lowest point around 10 am EDT, so it made a good if not complete recovery from that point). https://finance.yahoo.com/quote/%5EGSPC

[Yavin4]

10. Can someone explain the markets to me? I would've thought this would've been good news for stocks.

A slowing economy boosts the odd that the Fed will lower rates, right? And aren't lower rates great for stocks?

[jgmiller]

11. The best way to put it is the market has a split personality

One the one hand a roaring economy is good because in theory profits are up but too hot and costs go up so profits get hurt. So on the other hand they don't want it to go up too fast so they do want a slow down but if the slow down is too sharp then they worry that sales are slowing which means profits are slowing but also that expenses remain high.

It's obviously much, much more complex than this which I described at a very macro level. Different sectors react differently to GDP and of course so do different stocks.

Maybe a better way to put it is the market is never happy for very long

[progree]

12. No, but my guess is that this one was so far below expectations that it revived fears of a serious slowdown or recession

that would be significantly bad for profits. And that factored in larger than the increased odds there will be more rate cuts sooner than what people were thinking yesterday.

Sometimes the market goes up on bad economic news for the reason you described, and sometimes it goes down,

I think the shock of growth falling by half dominated in the early going, but from there the S&P 500 climbed from down 1.58% to down 0.46% as more traders contemplated a better rate cut environment coming -- hey this might not be so bad after all...

Just a guess.

[jgmiller]

13. Oh and someone is always making money in the market

An investment firm that was buying two days ago could be short today.

Decades ago when I learned investing you looked in the paper the next day to see how a stock did and unless something radical occurred the changes were usually small from day to day. They still talk about market stability being important but the reality is that by the very design of trading these days it is highly unstable from one moment to the next.

[progree]

14. The inflation reading that came with the report was a hotter than expected 3.7%

Bloomberg:

A closely watched measure of underlying inflation advanced at a greater-than-expected 3.7% clip, the first quarterly acceleration in a year, the Bureau of Economic Analysis report showed Thursday.

from Reply #3 above.

So that puts some degree of pessimism on rate cut hopes. I don't know if that affected the market to any noticable degree since its buried in stories about the report ...

The official PCE inflation report comes out tomorrow, so we'll see. It's the Fed's favorite inflation report (particularly the core PCE). That's one that gets a lot of attention.