This morning, the U.S. Bureau of Economic Analysis reported first-quarter reports of economic growth for 2024. At 1.6% growth, the U.S. hasn’t had strong growth since Q3 of 2020, if not at least since Q4 of 2021. The news isn’t all gloom, as consumer spending, personal income, and disposable personal income all increased. These gains, however, were offset by lower personal savings, a decrease in goods, and a continued increase in prices and inflation.
While the housing market is still ambiguous at best, and companies are still engaging in mass layoffs, the American people are looking for some stability in the economy. Interest rates remain high, due to high inflation and a standoff between the Federal Reserve and price increases.
The stock market seems to be adjusting to the news as the DJIA (-1.35%) and S&P (-.97%) slide after early morning market reaction to the news.
The question seems to be when will inflation and prices go down enough to trigger a move from the Fed to reduce interest rates. Right now, housing prices are still high, but demand is decreasing. If the Federal Reserve can be convinced that prices will decrease (and stay low), we may see some movement in interest, hopefully leading to stronger spending and wage growth.
