First-quarter GDP growth was revised up a tenth of a percentage point to a 1.4% seasonally adjusted annual rate in the Bureau of Economic Analysis’s third and final estimate published Thursday.
The revised growth rate for the quarter is lower than the preceding quarter’s 3.4% clip.
The government agency updates its GDP estimates over the course of several weeks as analysts get a better picture of how the economy performed during the first quarter.
The first quarter’s GDP reading is also a decline from all of 2023, when the economy expanded a healthy 2.5% for that year.
The weaker growth in the first quarter was attributable in part to slower consumer spending. That could be a response to the Federal Reserve’s efforts to curb inflation by keeping interest rates higher for longer.
For months, economists have expected GDP to slow down after the Fed raised its interest rate target to 5.25% to 5.50% in response to too-high inflation. Higher rates typically cause economic output to dampen.
But the previous few quarters of robust GDP numbers have given the Fed some ammunition to keep rates higher for longer, as has the underlying strength in the labor market.
The positive GDP growth has provided a talking point for President Joe Biden in his reelection bid.
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Despite the positive GDP growth and underlying strength of the labor market, voters have soured on Biden’s stewardship of the economy. That is in large part because of now three years of cumulative inflation and, to a lesser extent, higher interest rates from the Fed.
The final GDP estimate comes just hours before Biden is set to face off against former President Donald Trump in the first general election debate. The economy and inflation are issues that are expected to be discussed during the much-anticipated showdown.
