Yellen: Subpar U.S. growth may get revised up, inflation will ebb [View all]
Source: Reuters
April 25, 2024 11:49 AM EDT Updated an hour ago
WASHINGTON, April 25 (Reuters) - U.S. economic growth for the first quarter could be revised higher and inflation will ease to more normal levels, Treasury Secretary Janet Yellen told Reuters on Thursday after a clutch of "peculiar" factors held the economy to its weakest showing in nearly two years.
"The U.S. economy continues to perform very, very well," Yellen said in an interview with Reuters, responding to the Commerce Department's substantially weaker-than-expected initial estimate for U.S. gross domestic product from January through March. The report showed the economy grew at a 1.6% annualized rate - below the 2.4% estimated by economists and less than half the pace in the fourth quarter of 2023 - thanks to substantial drags from trade and private inventories.
"What I focus on most is the strength of consumer spending and investment spending," Yellen said. "Those two elements of final demand came in in line with last year's growth rate ... so this is the underlying strength of the U.S. economy that showed continuing robust strength and an economy firing on all cylinders."
"The headline figure was off a little bit but for reasons that are peculiar and not really indicative of underlying strength." Indeed, a number of private economists said the GDP data likely overstated any weakness in an economy that had grown at above the rate most see as its potential for nearly two years, despite aggressive interest rate hikes over that span by the U.S. Federal Reserve aimed at quashing inflation.
Read more: https://www.reuters.com/markets/us/yellen-says-economy-performing-well-inflation-will-ebb-2024-04-25/
