US Q1 GDP growth revised to 1.3%

Futures trimmed losses after US first-quarter GDP was revised down to 1.3%, as expected. Initial jobless claims rose to 219,000.

By Ahmed Azzam | @3zzamous | 30 May 2024

Market close
  • Q1 GDP revised to 1.3%

  • Consumer spending declines

  • Jobless claims rise to 219k

US GDP growth revised downward

The US economy grew at an annualized rate of 1.3% in the first quarter of 2024, down from an initial estimate of 1.6% and significantly lower than the 3.4% growth seen in the fourth quarter of 2023. The revised figure, which aligns with market expectations, highlights the slowest growth since the economic contractions in early 2022.

The downward revision was primarily due to weaker consumer spending, particularly in goods such as automobiles. Federal government spending decelerated, and imports rose compared to earlier estimates, leading to a negative contribution from net exports for the first time in two years.

Jobless claims edge up

Initial jobless claims in the US increased by 3,000 to 219,000 for the week ending May 25, slightly above the forecast of 218,000. The four-week moving average of initial claims also rose by 2,500 to 222,500.

Continuing claims saw an increase of 4,000, reaching 1.791 million for the week ending May 18. The four-week moving average of continuing claims climbed by 6,000 to 1.786 million.

Fed’s Bostic comments on inflation

Federal Reserve’s Raphael Bostic noted that many inflation indicators are trending towards the target range. He suggested that if both prices and the labor market continue to stabilize, the Fed might consider cutting interest rates in the fourth quarter.