The first reading of the first quarter 2024 Gross Domestic Product (GDP) showed that the U.S. economy grew by 1.6%. This was well below both the 2.5% estimate and the 3.4% growth seen in the fourth quarter of last year.
What’s the bottom line? Slower economic growth is typically good news for the bond market, but the hotter than expected inflation component within the report led to a sell-off when the data was reported last Thursday. Note that this data is subject to revision when the second and final readings are released on May 30 and June 27, respectively. However, the weaker than expected initial reading is disappointing given that GDP functions as a scorecard for the country’s economic health.