GDP growth weakens in first quarter; inflation remains high

The U.S. economy’s gross domestic product grew just 1.1 percent on an annual basis in the first quarter of 2023, according to a report from the Bureau of Economic Analysis. Economists had expected GDP growth of roughly 2 percent. GDP grew 3.2 percent between July and September and 2.6 percent from October through December.

What’s going on with inflation? Inflation remains high, even after the Federal Reserve raised interest rates nine times since March 2022 in an attempt to control it. Consumer spending grew by more than 4 percent in the first quarter of this year. High consumer spending could prop up inflation and force the Federal Reserve to raise interest rates even further. At its meeting next week, the Federal Reserve is expected to raise interest rates by a quarter of a percentage point.

Dig deeper: Listen to Nick Eicher’s conversation with David Bahnsen on The World and Everything in It podcast about American spending.