Growth in US gross domestic product slowed in the first quarter when compared to the fourth quarter of 2023.

GDP rose at an annual rate of 1.6% in the first quarter, the US Bureau of Economic Analysis announced today. That’s down from an annual rate of 3.4% in the fourth quarter.

The growth rate is below the consensus forecast of 2.2%, US News and World Report reported.

The slower growth rate in the first quarter when compared to the fourth quarter primarily reflects decelerations in consumer spending, exports and state and local government spending as well as a downturn in federal government spending. These were partially offset by an acceleration in residential fixed investment. Imports accelerated.

“Today’s milder report will likely be welcomed by the Fed,” Erik Lundh, principal economist at The Conference Board, wrote in a post. “Following stronger than expected inflation in [the first quarter] and a labor market that remains hot, these softer GDP numbers show that tight monetary policy is having an impact. However, given recent inflation trends, we expect the Fed to delay interest rate cuts further into the year.”

Lundh also noted that GDP data have undergone large revisions in recent quarters. Today’s estimate marks the first, or “advance,” estimate of GDP growth. A second estimate with more complete source data will be released on May 30.

Today’s report from the Bureau of Economic Analysis also indicated the increase in first-quarter GDP primarily reflects increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending. These were partially offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, rose.