Despite the challenge of rising interest rates, the U.S. economy exhibited remarkable resilience, achieving a solid annual growth rate of 2% during the period from January to March. This growth was largely driven by consumers, who increased their spending at the swiftest rate seen in almost two years.
WASHINGTON (AP) The Commerce Department’s revised figures on Thursday significantly upgraded its assessment of first-quarter growth, surpassing the previous estimate of a 1.3% annual rate.
However, despite the improvement, the final report on economic growth for January to March still indicated a slowdown compared to the 2.6% annual rate in the previous quarter (October to December) and the 3.2% growth in the quarter before that (July to September). The Federal Reserve’s aggressive efforts to control inflation through interest rate hikes since early last year have contributed to this deceleration.
Nevertheless, Thursday’s report on the nation’s gross domestic product (GDP), which represents the total output of goods and services, demonstrated why the economy has managed to defy expectations of an impending recession. Consumers have continued to spend, even in the face of rising borrowing costs. Their spending, which drives about 70% of the economy, increased at a robust annual rate of 4.2% in the January-March quarter, the highest since April-June 2021.
Despite the challenges posed by rising interest rates, the U.S. economy has shown remarkable resilience, achieving a solid annual growth rate of 2% during the January-March period. This growth was primarily propelled by consumers, who significantly accelerated their spending at the fastest pace observed in nearly two years.