US economy adds 1.4% in final reading for Q1 2024

The US economy grew at a higher pace in the final reading for the first quarter of this year, in line with analysts’ expectations, thanks to increased private consumption, steady investment in housing, and public spending by local governments and states.

The US real gross domestic product (GDP) advanced 1.4% on an annual basis in the final reading for Q1 2024, instead of 1.3% in the second reading, albeit lower than the initial reading of 1.6%, according to data by the Bureau of Economic Analysis (BEA) issued today, June 27.

The first quarter’s GDP growth marked a sharp pullback from a strong 3.4% pace during the final three months of 2023, which suggests the impact of the Federal Reserve’s monetary tightening policy on US economic activity.

The upward revision of the real economic growth rate, according to BEA, was due to the downward revision of imports data, coupled with the increased non-residential fixed investment and government spending.

It attributed the Q1 2024 GDP growth to higher consumer and public spending as well as fixed investment in housing and non-residential properties. However, this was offset by the decline in the stock of private investments during the same period.

The data indicated that US GDP at current prices grew by 4.5%, or $312.2 billion, on an annual basis in the first three months of the year to stand at $28.27 trillion. This also equated to an increase of $13.2 billion, compared to the previous reading.

As for the Fed's preferred measure of inflation, the growth rate of the personal consumption expenditure prices was revised up 0.1% to 3.4%. Further, its core counterpart - excluding food and energy prices - nudged up by the same percentage to record growth of 3.7%.