The US economy grew much less than economists had expected in the first quarter. Companies, among others, were more cautious and invested less. At the same time, consumer spending rose sharply as more cars were bought. In the quarter, American households spent less money.
US economic growth was 1.1 percent, down from 2.6 percent in the last three months of last year. Economists generally expect US economic growth to be 1.9 percent.
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compounded interest
A sharp rise in interest rates in the US may have resulted in the fall in growth. Further hikes by the central bank are expected as inflation remains high. But a cooling economy is prompting central bankers to remain cautious. At the same time, the rate of inflation, which is closely watched by Federal Reserve policymakers, rose faster than at the end of last year and faster than expected.
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The annual figure is a 1.1 percent increase. This means that quarterly growth is artificially stretched as if it had been at that level for an entire year. According to the methodology used in Europe, US growth would have been 0.3 percent in the first quarter.
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