Washington (AFP) – The US economy grew much less than economists expected in the first quarter. The companies, among others, were more cautious and invested less. At the same time, consumer spending has risen sharply, in part because more cars are being bought. This quarter, American households spent less money.
The growth of the US economy was 1.1 percent, compared to 2.6 percent in the last three months of last year. Economists generally expected the US economic growth rate to be 1.9%.
The lower growth may be the result of the sharp rise in interest rates in the United States. Another increase by the Fed is expected as inflation remains high. But a cold economy may prompt central bankers to exercise caution. At the same time, the closely watched inflation rate by federal policymakers rose faster than it did at the end of last year and also faster than expected.
The increase of 1.1 percent is an annual figure. This means that growth on a quarterly basis is artificially stretched as if it had been at this level for a full year. Under the method used in Europe, growth in the United States in the first quarter was 0.3 percent.
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