The United States economy slows down and grows only at a rate of 1.1% in the first quarter

The US economy begins to notice the rise in interest rates.

The gross domestic product of the first world power grew at an annualized quarterly rate of 1.1%, according to data released this Thursday by the Department of Commerce.

This is a lower figure than expected and equates to a quarterly rate of just 0.3%, less than half that of the previous quarter.

“Real GDP growth reflects increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment, which were partly offset by declines in investment in private inventories and residential fixed investment.

Imports, which remain in the calculation of GDP, increased ”, summarizes the Department of Commerce.

The growth is less than the annualized rate of 2.6% with which 2022 ended, equivalent to a quarterly rate of 0.7%, but it represents the third consecutive expansion figure for the economy.

Activity contracted in the first two quarters of 2022, but due to extraordinary factors related above all to international trade and changes in inventories that make it impossible to speak of a recession.

The US labor market has shown signs of strength, with unemployment nearing its lowest levels in half a century, while inflation has fallen for nine straight months from its peak in June last year, but remains very high and it has become entrenched in services.

Headline inflation fell from 6% in February to 5% in March, its lowest level since May 2021, but core inflation rose one tenth to 5.6% and is already above the headline, so those responsible for the price increases are no longer so much food and energy as the rest of products and services.

The Federal Reserve has been raising interest rates since the start of 2022, raising them by almost 5 percentage points, but has failed to cool demand enough to bring core inflation under control.

Consumption continues to drive the economy, although sectors more sensitive to the price of money, such as real estate, are noticing how rate hikes are weighing down their activity.

[Breaking news.

There will be expansion soon]

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