GDP Growth Overview
The U.S. economy expanded at an annual rate of 1.3% in the first quarter of 2024, according to the Bureau of Economic Analysis’ second estimate. This represents a significant slowdown from the 3.4% growth seen in Q4 2023. The revision from the initial 1.6% estimate was primarily due to reduced consumer spending.
Factors Influencing GDP
The GDP growth in Q1 was driven by increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending. However, these gains were partially offset by a decline in private inventory investment. Imports, which negatively impact GDP calculations, also increased.
Deceleration Compared to Previous Quarter
The deceleration from Q4 to Q1 is attributed to slower growth in consumer spending, exports, and state and local government spending, along with a decrease in federal government spending. This was somewhat counterbalanced by a boost in residential fixed investment and accelerated imports.
Current Dollar GDP and Price Indexes
In current dollar terms, GDP rose by 4.3%, or $298.9 billion, to $28.26 trillion in Q1, slightly down from earlier estimates. The price index for gross domestic purchases increased by 3.0%, and the personal consumption expenditures (PCE) price index rose by 3.3%, both seeing minor downward revisions. Excluding food and energy, the PCE price index increased by 3.6%.
Personal Income and Savings
Current-dollar personal income grew by $404.4 billion, driven by higher compensation and government social benefits. Disposable personal income increased by $266.7 billion, or 5.3%, with real disposable income rising by 1.9%. Personal saving reached $796.6 billion, with a saving rate of 3.8%.
US Dollar Index Price Forecast
Every new US Dollar Index analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all US Dollar Index forecastsCorporate Profits and GDI
Real gross domestic income (GDI) increased by 1.5% in Q1, down from 3.6% in Q4. Corporate profits fell by $21.1 billion, contrasting with the previous quarter’s $133.5 billion increase. Financial corporations’ profits rose significantly, while nonfinancial corporations saw a substantial decrease.
Market Forecast: Bearish Outlook
Given the deceleration in GDP growth, declining corporate profits, and slower consumer spending, the short-term outlook for the U.S. economy appears bearish. Traders should brace for potential market volatility as these economic indicators suggest weakening economic momentum.
