Another Republican President, Another Recession.

[hanimmal]

She speaks about taking part of the mesege out of context, not that those words weren't in the masege.
She neither denies the movement of the money. Hunter received money from Chinese company, gave them to his unt and she gave them to Joe. That is a proven fact.

Are you saying that there is a problem with an American citizen having a career that gets them paid by a Chinese company and then using their income to pay back their dad for a car that they gave them a loan for?

Facts don't equal nefarious.

The prosecutor who was investigating Hunter Biden's involvement in Ukrainian government corruption.

Old news, that was a Putin puppet that the world was good to have out of office, it was something that he was also open about and wasn't shady.

Are you saying that somehow outing corrupt office holders is a bad thing?

 

[cannabineer]

… that those words weren't in the masege.

When I’m getting a masege, I don’t want any distracting words.

… gave them to his unt

That is a startlingly disrespectful way to speak about a woman.

 

[OldMedUser]

Another swing, another miss.

 

[hanimmal]

https://apnews.com/article/congress-shutdown-budget-speaker-johnson-85dc1e93f6c49c154c02a166d0e8e784

WASHINGTON (AP) — The Senate passed a $1.2 trillion package of spending bills in the early morning hours Saturday, a long overdue action nearly six months into the budget year that will push any threats of a government shutdown to the fall. The bill now goes to President Joe Biden to be signed into law.

The vote was 74-24. It came after funding had expired for the agencies at midnight, but the White House sent out a notice shortly after the deadline announcing the Office of Management and Budget had ceased shutdown preparations because there was a high degree of confidence that Congress would pass the legislation and the president would sign it on Saturday.

“Because obligations of federal funds are incurred and tracked on a daily basis, agencies will not shut down and may continue their normal operations,” the White House statement said.

Prospects for a short-term government shutdown had appeared to grow Friday evening after Republicans and Democrats battled over proposed amendments to the bill. Any successful amendments to the bill would have sent the legislation back to the House, which had already left town for a two-week recess.

But shortly before midnight Senate Majority Leader Chuck Schumer announced a breakthrough.

“It’s been a very long and difficult day, but we have just reached an agreement to complete the job of funding the government,” Schumer said. “It is good for the country that we have reached this bipartisan deal. It wasn’t easy, but tonight our persistence has been worth it.”

While Congress has already approved money for Veterans Affairs, Interior, Agriculture and other agencies, the bill approved this week is much larger, providing funding for the Defense, Homeland Security and State departments and other aspects of general government.

The House passed the bill Friday morning by a vote of 286-134, narrowly gaining the two-thirds majority needed for approval. More than 70% of the money would go to defense.

The vote tally in the House reflected anger among Republicans over the content of the package and the speed with which it was brought to a vote. House Speaker Mike Johnson brought the measure to the floor even though a majority of Republicans ended up voting against it. He said afterward that the bill “represents the best achievable outcome in a divided government.”

In sign of the conservative frustration, Rep. Marjorie Taylor Greene, R-Ga., initiated an effort to oust Johnson as the House began the vote but held off on further action until the House returns in two weeks. It’s the same tool that was used last year to remove the last Republican speaker, Kevin McCarthy of California.



The vote breakdown showed 101 Republicans voting for the bill and 112 voting against it. Meanwhile, 185 Democrats voted for the bill and 22 against.

Rep. Kay Granger, the Republican chair of the House Appropriations Committee that helped draft the package, stepped down from that role after the vote. She said she would stay on the committee to provide advice and lead as a teacher for colleagues when needed.

Johnson broke up this fiscal year’s spending bills into two parts as House Republicans revolted against what has become an annual practice of asking them to vote for one massive, complex bill called an omnibus with little time to review it or face a shutdown. Johnson viewed that as a breakthrough, saying the two-part process was “an important step in breaking the omnibus muscle memory.”

Still, the latest package was clearly unpopular with most Republicans, who viewed it as containing too few of their policy priorities and as spending too much.

“The bottom line is that this is a complete and utter surrender,” said Rep. Eric Burlison, R-Mo.

It took lawmakers six months into the current fiscal year to get near the finish line on government funding, the process slowed by conservatives who pushed for more policy mandates and steeper spending cuts than a Democratic-led Senate or White House would consider. The impasse required several short-term, stopgap spending bills to keep agencies funded.

The first package of full-year spending bills, which funded the departments of Veterans Affairs, Agriculture and the Interior, among others, cleared Congress two weeks ago with just hours to spare before funding expired for those agencies.

When combining the two packages, discretionary spending for the budget year will come to about $1.66 trillion. That does not include programs such as Social Security and Medicare, or financing the country’s rising debt.

To win over support from Republicans, Johnson touted some of the spending increases secured for about 8,000 more detention beds for migrants awaiting their immigration proceedings or removal from the country. That’s about a 24% increase from current levels. Also, GOP leadership highlighted more money to hire about 2,000 Border Patrol agents.

Democrats, meanwhile, are boasting of a $1 billion increase for Head Start programs and new child care centers for military families. They also played up a $120 million increase in funding for cancer research and a $100 million increase for Alzheimer’s research.

“Make no mistake, we had to work under very difficult top-line numbers and fight off literally hundreds of extreme Republican poison pills from the House, not to mention some unthinkable cuts,” said Sen. Patty Murray, the Democratic chair of the Senate Appropriations Committee.

Sen. Susan Collins, the top Republican on that committee, appealed to her GOP colleagues by stating that the bill’s spending on non-defense programs actually decreases even before accounting for inflation. She called the package “conservative” and “carefully drafted.”

“These bills are not big spending bills that are wildly out of scope,” Collins said.

The spending package largely tracks with an agreement that then-Speaker McCarthy worked out with the White House in May 2023, which restricted spending for two years and suspended the debt ceiling into January 2025 so the federal government could continue paying its bills.

Shalanda Young, director of the White House Office of Management and Budget, told lawmakers that last year’s agreement, which became the Fiscal Responsibility Act, will save the federal government about $1 trillion over the coming decade.

 

[Towwelie]

that they gave them a loan for?

There is no record of that loan.

Are you saying that somehow outing corrupt office holders is a bad thing

Holding ransom a democratic sovereign state is bad. That is called RICO, the exact thing Biden is being impeached.
And that "Putin's puppet" were appointed by new government after revolution of 2014. That shows that Putin was right, when he said that Poroshenko and Zelensky are US puppets.

 

[Towwelie]

https://apnews.com/article/congress-shutdown-budget-speaker-johnson-85dc1e93f6c49c154c02a166d0e8e784
View attachment 5380193

Democratic president is borrowing another $1.2 trillion just to keep government working. Who will pay the debt?

 

[doublejj]

Democratic president is borrowing another $1.2 trillion just to keep government working. Who will pay the debt?

tax the rich.....you know the ones that pay "0" tax now. Let them pay their fair share.

 

[hanimmal]

There is no record of that loan.

lmao yeah right, I know I have receipts for every fucking loan my dad gave me growing up.

Holding ransom a democratic sovereign state is bad. That is called RICO, the exact thing Biden is being impeached.
And that "Putin's puppet" were appointed by new government after revolution of 2014. That shows that Putin was right, when he said that Poroshenko and Zelensky are US puppets.

suuuuuuuuuuuurrrrrrrrreeeeee it is, you really like that ruski talking points eh?

 

[hanimmal]

Democratic president is borrowing another $1.2 trillion just to keep government working. Who will pay the debt?

Not the wealthiest if Trump and the Republicans have anything to say about it.

 

[Towwelie]

Are you saying that there is a problem with an American citizen having a career that gets them paid by a Chinese company and then using their income to pay back their dad for a car that they gave them a loan for?

When it's the president som, yes, there is a problem. The problem called conflict of interest.

suuuuuuuuuuuurrrrrrrrreeeeee it is, you really like that ruski talking points eh?

That guy was appointed by Poroshenko, he couldn't be a Putin's puppet. Or you want to say, that democratically elected president appointed a russian supporter to atterney general role?
And, by the way, "Do what I say or else..." is racketeering.

 

[Towwelie]

View attachment 5381230


Not the wealthiest if Trump and the Republicans have anything to say about it.

Where are those $1.2 trillions in this chart?

tax the rich

Why don't Joe do that? Trump manager singlehandedly cut the taxes, why Biden can't do opposite?

 

[Fogdog]

Where are those $1.2 trillions in this chart?


Why don't Joe do that? Trump manager singlehandedly cut the taxes, why Biden can't do opposite?

Trump did not cut taxes. He deferred payment of them to later generations.

 

[doublejj]

 

[Fogdog]

Thanks Joe.

Applications for US unemployment benefits dip to 210,000 in strong job market

The number of Americans signing up for unemployment benefits fell slightly last week, another sign that the labor market remains strong and most workers enjoy extraordinary job security.

apnews.com

Applications for US unemployment benefits dip to 210,000 in strong job market

Applications for unemployment benefits are viewed as a proxy for layoffs and a sign of where the job market is headed. Despite job cuts at Stellantis Electronic Arts, Unilever and elsewhere, overall layoffs remain below pre-pandemic levels. The unemployment rate, 3.9% in February, has come in under 4% for 25 straight months, longest such streak since the 1960s.

 

[hanimmal]

https://apnews.com/article/inflation-prices-election-federal-reserve-rates-economy-1e44dbd90769dbe968fd6ee702c7006a

WASHINGTON (AP) — A measure of inflation that is closely tracked by the Federal Reserve slipped last month in a sign that price pressures continue to ease.

The government reported Friday that prices rose 0.3% from January to February, decelerating from a 0.4% increase the previous month in a potentially encouraging trend for President Joe Biden’s re-election bid. Compared with 12 months earlier, though, prices rose 2.5% in February, up slightly from a 2.4% year-over-year gain in January.

Excluding volatile food and energy costs, last month’s “core” prices suggested lower inflation pressures. These prices rose 0.3% from January to February, down from 0.5% the previous month. And core prices rose just 2.8% from 12 months earlier — the lowest such figure in nearly three years — down from 2.9% in January. Economists consider core prices to be a better gauge of the likely path of future inflation.

Friday’s report showed that a sizable jump in energy prices — up 2.3% — boosted the overall prices of goods by 0.5% in February. By contrast, inflation in services — a vast range of items ranging from hotel rooms and restaurant meals to healthcare and concert tickets — slowed to a 0.3% increase, from a 0.6% rise in January.

The figures also revealed that consumers, whose purchases drive most of the nation’s economic growth, surged 0.8% last month, up from a 0.2% gain in January. Some of that increase, though, reflected higher gasoline prices.

Annual inflation, as measured by the Fed’s preferred gauge, tumbled in 2023 after having peaked at 7.1% in mid-2022. Supply chain bottlenecks eased, reducing the costs of materials, and an influx of job seekers made it easier for employers to keep a lid on wage growth, one of the drivers of inflation.

Still, inflation remains stubbornly above the Fed’s 2% annual target, and opinion surveys have revealed public discontent that high prices are squeezing America’s households despite a sharp pickup in average wages.

The acceleration of inflation began in the spring of 2021 as the economy roared back from the pandemic recession, overwhelming factories, ports and freight yards with orders. In March 2022, the Fed began raising its benchmark interest rate to try to slow borrowing and spending and cool inflation, eventually boosting its rate 11 times to a 23-year high. Those sharply higher rates worked as expected in helping tame inflation.

The jump in borrowing costs for companies and households was also expected, though, to cause widespread layoffs and tip the economy into a recession. That didn’t happen. The economy has grown at a healthy annual rate of 2% or more for six straight quarters. Job growth has been solid. And the unemployment rate has remained below 4% for 25 straight months, the longest such streak since the 1960s.

The combination of easing inflation and sturdy growth and hiring has raised expectations that the Fed will achieve a difficult “soft landing″ — taming inflation without causing a recession. If inflation continues to ease, the Fed will likely begin cutting its key rate in the coming months. Rate cuts would, over time, lead to lower costs for home and auto loans, credit card borrowing and business loans. They might also aid Biden’s re-election prospects.

Michael Pearce, economist at Oxford Economics, said that even a 0.3% January-to-February uptick in consumer prices was probably still too hot for the Fed’s inflation fighters. The central bank has signaled that it expects to cut rates three times this year, and Wall Street investors have been eagerly awaiting the move. Pearce wrote that a June rate cut now looks more likely than the May cut that he and his Oxford colleagues had previously expected.

The Fed tends to favor the inflation gauge that the government issued Friday — the personal consumption expenditures price index — over the better-known consumer price index. The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.

In general, the PCE index tends to show a lower inflation level than CPI. In part, that’s because rents, which have been high, carry double the weight in the CPI that they do in the PCE.

Friday’s government report showed that Americans’ incomes rose 0.3% in February, down sharply from a 1% gain in January, which had been boosted by once-a-year cost-of-living increases in Social Security and other government benefits.

 

[hanimmal]

https://apnews.com/article/job-openings-unemployment-federal-reserve-inflation-economy-3b581fc4ac0fd863750ed7c8a7733e46

WASHINGTON (AP) — U.S. job openings barely changed in February, staying at historically high levels in a sign that the American job market remains strong.

The Labor Department reported Tuesday that employers posted 8.76 million job vacancies in February, up modestly from 8.75 million in January and about what economists had forecast.

But the Job Openings and Labor Turnover Survey, or JOLTS, showed that layoffs ticked up to 1.7 million in February from 1.6 million in January, highest since March 2023. The number of Americans quitting their jobs – a sign of confidence they can find better pay or working conditions elsewhere – rose modestly to 3.5 million.

Monthly job openings are down from a peak of 12.2 million in March 2022 but are still at a high level. Before 2021, they’d never topped 8 million.

The high level of vacancies is a sign of the job market’s strength and endurance. When the Federal Reserve began raising its benchmark interest rates two years ago to combat inflation, most economists expected the higher borrowing costs to send the United States into recession.

Instead, the economy has continued to grow and employers have been seeking new workers and holding on to the ones they already have. Although the unemployment rate rose to 3.9% in February, it’s come in below 4% for 25 straight months, longest such streak since the 1960s.

At the same time, the higher rates have brought inflation down. In February, consumer prices were up 3.2% from a year earlier — down from a four-decade high year-over-year peak of 9.1% in June 2022.

The combination of easing inflation and sturdy job growth has raised hopes the Fed is managing to pull off a “soft landing’’ — taming inflation without triggering a recession. The Fed stopped raising rates last July and has signaled that it plans to reverse course and cut rates three times in 2024. But it appears to be in no hurry to start, given the economy’s strength and with inflation still above the central bank’s 2% target.

“Job openings are still elevated relative to pre-pandemic readings, signaling still-strong demand for workers,’’ said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “A strong labor market backdrop coupled with inflation receding but remaining above target supports the (Fed’s) current patient stance on future policy decisions.’’

Compared to layoffs, the steady drop in job openings is a painless way to cool a labor market that has been red hot, easing upward pressure on wages that can lead to higher prices.

Hiring likely remained healthy last month. Economists expect the March jobs report, out Friday, to show that employers added nearly 193,000 jobs and that the unemployment dipped to 3.8%, according to a survey of forecasters by the data firm FactSet.{?QUOTE]
A workman secures sheathing at a residential construction site in Mount Prospect, Ill., Monday, March 18, 2024. On Tuesday, April 2, 2024, the Labor Department reports on job openings and labor turnover for February. (AP Photo/Nam Y. Huh)

 

[hanimmal]

https://apnews.com/article/yellen-china-trade-overcapacity-ev-solar-7f861ff193fdc35b355c650fb84d204c

GUANGZHOU, China (AP) — U.S. Treasury Secretary Janet Yellen called on China on Friday to address manufacturing overcapacity that she said risks causing global economic dislocation, and to create a level playing field for American companies and workers.

Starting a five-day visit in one of China’s major industrial and export hubs, she raised what the U.S. considers to be unfair Chinese trade practices in talks with senior Chinese officials.

“The United States seeks a healthy economic relationship with China that benefits both sides,” she said ahead of a meeting with Chinese Vice Premier He Lifeng in the southern city of Guangzhou. “But a healthy relationship must provide a level playing field for firms and workers in both countries.”

Earlier, she said at an an event hosted by the American Chamber of Commerce in China that there are “Chinese practices that are tilting the playing field away from American workers and firms.”

He didn’t get into specifics in his remarks before the media but said that both sides “need to properly respond to key concerns of the other side.”

High on Yellen’s list is the overcapacity issue. Chinese government subsidies and other policy support have encouraged solar panel and EV makers in China to invest in factories, building far more production capacity than the domestic market can absorb.

The massive scale of production has driven down costs and ignited price wars for green technologies, a boon for consumers and efforts to reduce global dependence on fossil fuels. But Western governments fear that that capacity will flood their markets with low-priced exports, threatening American and European jobs.

Yellen, the first Cabinet-level official to visit China since President Joe Biden met Chinese leader Xi Jinping last November, told the vice premier and the governor of Guangdong province in separate meetings that it is important for the U.S. and China to have open and direct communication on areas of disagreement.

“This includes the issue of China’s industrial overcapacity, which the United States and other countries are concerned can cause global spillovers,” she said during her meeting with the governor.

Guangzhou is the provincial capital of Guangdong, a Chinese manufacturing and export hub that is home to telecom giant Huawei and BYD, China’s largest EV maker. Huawei has been hit hard by U.S. restrictions on semiconductor exports to China and is at the vanguard of Chinese efforts to become self-sufficient and a leader in technology.

Yellen, who will also visit Beijing on her trip, met with both U.S. and European and Japanese business representatives before her meeting with He.

“I’ve heard from many American business executives that operating in China can be challenging,” she said at the American Chamber event in an auditorium at a marbled convention center in the Baiyun District of Guangzhou.

Citing a recent survey by the Chamber that found that a third of American firms in China say they have experienced unfair treatment compared with local competitors, Yellen said the U.S. has seen China “pursue unfair economic practices, including imposing barriers to access for foreign firms and taking coercive actions against American companies.”

“I strongly believe that this doesn’t only hurt these American firms: Ending these unfair practices would benefit China by improving the business climate here. I intend to raise these issues in meetings this week,” she said in her speech.

China has pushed back against the overcapacity concerns expressed by both the U.S. and Europe.

Foreign Ministry spokesperson Wang Wenbin said earlier this week that the growth in Chinese EV and solar exports is conducive to green development globally and the result of the international division of labor and market demand.

He accused the U.S. of interfering with free trade by restricting technology exports to China.

“As for who is doing non-market manipulation, the fact is for everyone to see,” he said. “The U.S. has not stopped taking measures to contain China’s trade and technology. This is not ‘de-risking,’ rather, it is creating risks.”

Yellen said at the American Chamber event that “excess capacity is a concern that many countries share — from a range of advanced and developing countries and is not something that’s new.”

“This is not anti-China policy,” she said. “It’s an effort for us to mitigate the risks from the inevitable global economic dislocation that will result if China doesn’t adjust its policies.”

Scott Paul, president of the Alliance for American Manufacturing — an alliance of businesses and the U.S. Steelworkers union — told The Associated Press ahead of Yellen’s trip that there are low expectations about the Chinese government’s response.

“One thing that Yellen hopefully can and should say is that the U.S. is prepared to use all the tools that we have available through policy to ensure that China’s industrial overcapacity doesn’t negatively harm our economic and national security interests,” he said.

The Alliance released a report in February that says the introduction of inexpensive Chinese autos to the American market “could end up being an extinction-level event for the U.S. auto sector.” The U.S. auto sector accounts for 3% of America’s GDP, according to the report.

Yellen told reporters Wednesday during an Alaska refueling stop en route to Asia that the U.S. “won’t rule out” tariffs to respond to China’s heavily subsidized manufacturing of green energy products.

 

[hanimmal]

https://apnews.com/article/jobs-hiring-unemployment-economy-inflation-federal-reserve-1e456b8df0e11b218ed50f1ead6f6797

WASHINGTON (AP) — America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates.

Last month’s job growth was up from a revised 270,000 in February and was far above the 200,000 economists had forecast. By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand.

Friday’s report from the Labor Department also showed that the unemployment rate dipped to 3.8% from 3.9% in February. That rate has now come in below 4% for 26 straight months, the longest such streak since the 1960s.

Normally, a blockbuster bounty of new jobs would fan worries that the additional spending from those new workers could accelerate inflation. But the March jobs report showed that wage growth was mild last month, which might allay any such fears. Average hourly wages were up 4.1% from a year earlier, the smallest year-over-year increase since mid-2021. But hourly pay rose 0.3% from February to March after increasing 0.2% the month before.

The economy is sure to weigh on Americans’ minds as the November presidential vote nears and they assess President Joe Biden’s re-election bid. Many people still feel squeezed by the inflation surge that erupted in the spring of 2021. Eleven rate hikes by the Fed have helped send inflation tumbling from its peak over the past year and a half. But average prices are still about 18% higher than they were in February 2021 — a fact for which Biden might pay a political price.

The Fed’s policymakers are tracking the state of the economy, the job market and inflation to determine when to begin cutting interest rates from their multi-decade highs — a move eagerly awaited by Wall Street traders, businesses, homebuyers and people in need of cars, household appliances and other major purchases that are typically financed. Rate cuts by the Fed would likely lead, over time, to lower borrowing rates across the economy.

The central bank’s policymakers started raising rates two years ago to try to tame inflation, which by mid-2022 was running at a four-decade high. Those rate hikes — 11 of them from March 2022 through July 2023 — helped drastically slow inflation. Consumer prices were up 3.2% in February from a year earlier, far below a year-over-year peak of 9.1% in June 2022.

Yet the sharply higher borrowing costs for individuals and companies that resulted from the Fed’s rate hikes were widely expected to trigger a recession, with waves of layoffs and a painful rise in unemployment. Yet to the surprise of just about everyone, the economy has kept growing steadily and employers have kept hiring at a healthy pace. Layoffs remain low.

Some economists believe that a rise in productivity — the amount of output that workers produce per hour — made it easier for companies to hire, raise pay and post bigger profits without having to raise prices. In addition, an influx of immigrants into the job market is believed to have addressed labor shortages and slowed upward pressure on wage growth. This helped allow inflation to cool even as the economy kept growing.

In the meantime, the Fed has signaled that it expects to cut rates three times this year. But it is awaiting more inflation data to gain further confidence that annual price increases are heading toward its 2% target. Some economists have begun to question whether the Fed will need to cut rates anytime soon in light of the consistently durable U.S. economy.

 

[hanimmal]

https://apnews.com/article/unemployment-benefits-jobless-claims-labor-layoffs-934ebbd4f2a1a00849182ce931a18e98

WASHINGTON (AP) — Fewer Americans applied for jobless benefits last week as the labor market continues to thrive despite the Federal Reserve’s efforts to cool it.

The Labor Department reported Thursday that filings for unemployment claims for the week ending April 6 fell by 11,000 to 211,000 from the previous week’s 222,000.

The four-week average of claims, which smooths out some of the week-to-week swings, fell by 250 to 214,250.

Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.

The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to stifle the four-decade high inflation that took hold after the economy bounced back from the COVID-19 recession of 2020. Part of the Fed’s goal was to loosen the labor market and cool wage growth, which it believes contributed to persistently high inflation.

Many economists thought there was a chance the rapid rate hikes could tip the country into recession, but jobs have remained plentiful and the economy has held up better than expected thanks to strong consumer spending.

In March, U.S. employers added a surprising 303,000 jobs, yet another example of the U.S. economy’s resilience in the face of high interest rates. The unemployment rate dipped from 3.9% to 3.8% and has now remained below 4% for 26 straight months, the longest such streak since the 1960s.

Though layoffs remain at low levels, companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple, eBay, TikTok, Snap, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.

Outside of tech and media, UPS, Macy’s and Levi Strauss also have recently cut jobs.

In total, 1.82 million Americans were collecting jobless benefits during the week that ended March 30, an increase of 28,000 from the previous week and the most since January.

 

[hanimmal]

https://apnews.com/article/economy-growth-inflation-gdp-consumers-federal-reserve-5a64d255a09313dabe54954060a09530

WASHINGTON (AP) — The nation’s economy slowed sharply last quarter to a 1.6% annual pace in the face of high interest rates, but consumers — the main driver of economic growth — kept spending at a solid pace.

Thursday’s report from the Commerce Department said the gross domestic product — the economy’s total output of goods and services — decelerated from its brisk 3.4% growth rate in the final three months of 2023.



A surge in imports, which are subtracted from GDP, reduced first-quarter growth by nearly 1 percentage point. Growth was also held back by businesses reducing their inventories. Both those categories tend to fluctuate sharply from quarter to quarter.

By contrast, the core components of the economy still appear sturdy. Along with households, businesses helped drive the economy last quarter with a strong pace of investment.

The import and inventory numbers can be volatile, so “there is still a lot of positive underlying momentum,’' said Paul Ashworth, chief North America economist at Capital Economics.

The economy, though, is still creating price pressures, a continuing source of concern for the Federal Reserve. A measure of inflation in Friday’s report accelerated to a 3.4% annual rate from January through March, up from 1.8% in the last three months of 2023 and the biggest increase in a year. Excluding volatile food and energy prices, so-called core inflation rose at a 3.7% rate, up from 2% in fourth-quarter 2023.

The state of the U.S. economy has seized Americans’ attention as the election season has intensified. Although inflation has slowed sharply from a peak of 9.1% in 2022, prices remain well above their pre-pandemic levels.

Republican critics of President Joe Biden have sought to pin responsibility for high prices on Biden and use it as a cudgel to derail his re-election bid. And polls show that despite the healthy job market, a near-record-high stock market and the sharp pullback in inflation, many Americans blame Biden for high prices.

The economy’s gradual slowdown reflects, in large part, the much higher borrowing rates for home and auto loans, credit cards and many business loans that have resulted from the 11 interest rate hikes the Fed imposed in its drive to tame inflation.

Even so, the United States has continued to outpace the rest of the world’s advanced economies. The International Monetary Fund has projected that the world’s largest economy will grow 2.7% for all of 2024, up from 2.5% last year and more than double the growth the IMF expects this year for Germany, France, Italy, Japan, the United Kingdom and Canada.

Businesses have been pouring money into factories, warehouses and other buildings, encouraged by federal incentives to manufacture computer chips and green technology in the United States. On the other hand, their spending on equipment has been weak. And as imports outpace exports, international trade is also thought to have been a drag on the economy’s first-quarter growth.



Kristalina Georgieva, the IMF’s managing director, cautioned last week that the “flipside″ of strong U.S. economic growth was that it was ”taking longer than expected” for inflation to reach the Fed’s 2% target, although price pressures have sharply slowed from their mid-2022 peak.

Inflation flared up in the spring of 2021 as the economy rebounded with unexpected speed from the COVID-19 recession, causing severe supply shortages. Russia’s invasion of Ukraine in February 2022 made things significantly worse by inflating prices for the energy and grains the world depends on.

The Fed responded by aggressively raising its benchmark rate between March 2022 and July 2023. Despite widespread predictions of a recession, the economy has proved unexpectedly durable. Hiring so far this year is even stronger than it was in 2023. And unemployment has remained below 4% for 26 straight months, the longest such streak since the 1960s.

Inflation, the main source of Americans’ discontent about the economy, has slowed from 9.1% in June 2022 to 3.5%. But progress has stalled lately.

Though the Fed’s policymakers signaled last month that they expect to cut rates three times this year, they have lately signaled that they’re in no hurry to reduce rates in the face of continued inflationary pressure. Now, a majority of Wall Street traders don’t expect them to start until the Fed’s September meeting, according to the CME FedWatch tool.