U.S. GDP rose at a 1.1% pace in the first quarter as signs build that the economy is slowing

Overall economic growth has slowed at a large rate within the first 3 months of 2023. This is largely due to covid, but also because of the continuing effects that inflation and high-interest rates have on the economy. On top of that, Gross domestic product (GDP) has risen at a 1.1 percent annualized pace within the first economic quarter - the expected growth was 2 percent. The U.S. Bureau of Economic Analysis also measured the personal consumption expenditures price index, which saw an increase of 4.2 percent, which is half a percent above the estimate of 3.7 percent. If you exclude things like food and energy within the PCE, then it saw an increase of 4.9 percent which is .5 percent more than the previous increase of 4.4 percent. 

Following this report, it was stated that a Citigroup economist named Veronica Clark said “Overall, I think it’s a relatively inflationary report, even though the headline GDP number is a bit softer. All of those signs that demand is still strong and prices are still rising were very much present today.” Although Veronica sees optimism in overall inflation, her expectation is that the U.S. economy will sooner or later tip into a recession. Given the recent Q1 data for 2023, Veronica believes that we will not slip into this recession just yet but is something we should expect and prepare for. 

The recession scare is coming from data that reports slow growth. For example, the economy has seen a decline in private inventory investment, a deceleration in nonresidential fixed investment, and a Gross private domestic investment that fell 12.5 percent. However, things that counteract this recession scare come from an increase in personal consumption expenditures by 3.7 percent and an increase in exports by 4.8 percent. 

Overall, the economy is likely to see itself in a recession within a year and a half to two years. This is simply based on slow growth and the rate of joblessness (3.5% unemployment rate - 230,000 jobless claims).

https://www.cnbc.com/2023/04/27/gdp-q1-2023-.html