Gross domestic product in the United States grew by 1.1% in the first quarter of 2023, said the Commerce Department on Thursday, far lower than economists had predicted.
The result was down from a 2.6% pace in the last three months of 2022, but it was a third consecutive quarter of growth after output declined in the first half of last year.
Dow Jones said that economists expected growth of 2%. The report showed that inflation was higher than predicted, coming in at 4% rather than 3.7%.
The figures are preliminary and will be revised at least twice as additional information becomes available.
Weakness in housing and corporate investment, both of which are highly sensitive to interest rate changes, weighed on growth in the first quarter. Since the beginning of last year, the Federal Reserve has increased interest rates by about five percentage points to combat inflation.
Consumers, however, have shown remarkable resilience in the face of inflation and increased interest rates. The rate of inflation-adjusted spending growth accelerated to 3.7% in the first quarter from 1% in the previous three months.
