U.S. Economy Grows Modestly in 1st Quarter 2023

The U.S. economy revealed signs of a slowdown in 1st quarter, expanding less than expected as higher interest rates have impacted the housing market and reduced inventories for businesses. According to the advance estimate for real gross domestic product (GDP) recently released by the Bureau of Economic Analysis, real GDP grew at an annual rate of 1.1% in the first three months of 2023. While the U.S. economy is still growing, that recent expansion rate was below the 2% forecast and well below the 3.2% and 2.6% annualized rates recorded in 3rd quarter 2022 and 4th quarter 2022, respectively. The recent increase in real GDP reflected increases in consumer spending, exports, government spending and nonresidential fixed investment. Those increases were partly offset by decreases in private inventory investment and residential fixed investment. The recent GDP estimate will be revised several more times based on more complete source data. The second estimate for 1st quarter GDP will be released on May 25th.