Welcome to Extreme Investor Network, where we provide unique insights and in-depth analysis on the latest economic trends. In today’s blog post, we take a closer look at the expected growth of the U.S. economy in the first quarter of the year and how it compares to previous quarters.
According to the Dow Jones consensus forecast, the Gross Domestic Product (GDP) is expected to expand at a 2.4% annualized rate in the first quarter. This would represent a slight step down from the 3.4% growth rate in the fourth quarter of 2023, but still ahead of the 2.5% growth rate for the full year. Despite this dip, the economy is showing solid progress and is performing better than the average rate between the financial crisis of 2008-09 and the onset of the Covid pandemic in 2020.
EY-Parthenon chief economist Gregory Daco is optimistic about the economy, projecting a 2.6% growth rate for the first quarter. Daco notes that consumer spending and the housing sector are driving factors, with the labor market continuing to support income growth and consumer spending activity. While there are signs of a slight cooling in the labor market, it is not alarming and is not expected to significantly impact future income and spending trends.
There are indications that GDP gains could be even greater than the consensus forecast, with the Atlanta Federal Reserve’s GDPNow tracker pointing to a 2.7% growth rate. Goldman Sachs is even more bullish, forecasting a 3.1% growth rate based on factors such as a rise in residential investment, increased auto production, and strong consumption growth. Goldman expects consumption to rise by 3.3%, driven by core retail spending and positive revisions in the March retail sales report.
The GDP report is set to be released on Thursday at 8:30 a.m. ET, providing valuable insights into the state of the U.S. economy. In addition to GDP data, the report will include information on the personal consumption expenditures prices price index and the chain-weighted price index, offering key inflation readings for the Federal Reserve.
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