US economic growth slows, consumer spending stays strong in Q1: NRF

This optimism is supported by recent labour statistics showing a three-month average payroll gain of 276,000 in March, the fastest pace in a year. However, job openings have decreased to their lowest in three years as of March, suggesting a potential easing in the labour market which could reduce wage growth pressure.

April's employment data revealed continued economic expansion albeit at a subdued pace, with 175,000 new jobs added and a slight increase in the unemployment rate to 3.9 per cent from 3.8 per cent in March. The ongoing wage gains, which have remained steady with private industry wages growing at an average of 4.3 per cent year-over-year (YoY) in the first quarter, continue to support consumer expenditure but are a concern for Federal Reserve officials who are striving to control inflation pressures. As a result, the Fed opted to maintain interest rates unchanged last week, and the anticipated rate reduction expected potentially in June now appears likely to be postponed.

Kleinhenz said: “The US economy lost some spring in its step during the first quarter as the pace of growth declined, and the downshift came with an unexpected bout of inflation. But even with signs that the economic expansion is decelerating, the economy remains resilient, boosted by a solid job market and continued spending by consumers and businesses.

“While substantial progress has been made on inflation since its peak in 2022, high prices are sticking around longer than expected. The Personal Consumption Expenditures Price Index followed by the Federal Reserve showed that YoY inflation—driven largely by prices for services—shot up to 3.4 per cent during the first quarter. That compared with 1.8 per cent in the previous quarter.”

Fibre2Fashion News Desk (DP)