America’s Stronger Than Expected GDP Growth, But Inflation and Weak Exports Take Their Toll

In the first quarter of 2024, the US economy expanded by 1.4%, according to the Commerce Department’s third and final reading released on Thursday, a slight increase from the second reading of 1.3% in the previous month. The American economy had also expanded by 3.4% in the fourth quarter of 2023. The current dollar GDP saw an increase of 4.5% at an annual rate, or $312.2 billion, bringing the total GDP to $28.77 trillion.

The new figure is approximately $13.2 billion higher than the previous estimate made in May, indicating that the US economy is performing better than expected. Personal income increased by $396.8 billion in the first quarter, with a downward revision of $7.7 billion according to the agency’s statements. Disposable personal income rose by $240.2 billion, representing an increase of 4.8% in the January-March period, while personal saving rate remained at 3.8%.

The most interesting aspect of this report is that real gross domestic income increased by only 1%, which is significantly lower than expected due to weak exports and high inflation rates affecting consumer spending patterns and business investments decisions