In Q1 2024, the U.S. economy experienced slower growth than anticipated, with inflation rising again during this period. Despite this, economists are not overly concerned as the Federal Reserve has been implementing measures to control inflation for the past two years. However, the rise in the price index for personal consumption expenditure (PCE), which is the Fed’s preferred measure of inflation, is a cause for concern. In Q1 2024, the PCE price index increased by 3.4 percent annually, nearly double the growth rate from the previous quarter. The core PCE index, which excludes food and energy prices, rose by 3.7 percent during this period, surpassing the Fed’s target of 2.0 percent for the past two quarters. This surge in inflation has diminished hopes of any imminent rate cuts by the Fed to stimulate economic growth.
Slower US Economy Growth and Rising Inflation: What it Means for the Future of Economic Stimulus
