The latest data from the Bureau of Economic Analysis reveals that the real gross domestic product (GDP) in the first quarter of 2024 increased by 1.6 percent, down from the 3.4 percent growth seen in the fourth quarter of 2023.
This initial estimate of GDP is subject to potential revisions as more comprehensive data becomes available. The next update, based on more complete data, is scheduled for release on May 30, 2024.
The increase in real GDP was primarily driven by rises in consumer spending, residential and nonresidential fixed investment, and state and local government spending. However, these gains were partially offset by a decrease in private inventory investment and an increase in imports, which subtract from the GDP calculation.
Consumer spending saw an uptick in services, particularly in healthcare, financial services, and insurance, while there was a decrease in goods, notably in motor vehicles, parts, and energy goods.
Residential fixed investment rose, led by commissions and new single-family housing construction, while nonresidential fixed investment increased mainly due to investments in intellectual property products.
State and local government spending increased, driven by higher compensation for employees. Conversely, inventory investment decreased, mainly in wholesale trade and manufacturing.
Compared to the previous quarter, the slowdown in real GDP growth was primarily due to decreases in consumer spending, exports, and government spending, partially offset by an acceleration in residential fixed investment.
In terms of current-dollar GDP, there was a 4.8 percent increase in the first quarter, reaching $28.28 trillion. This growth rate was slightly lower than the 5.1 percent increase seen in the fourth quarter of the previous year.
Price indexes also saw increases, with the price index for gross domestic purchases rising by 3.1 percent and the personal consumption expenditures (PCE) price index increasing by 3.4 percent. Excluding food and energy prices, the PCE price index increased by 3.7 percent.