American economic growth slowed to a 1.1% annualized rate in the first quarter of 2023, marking a significant slowdown from previous quarters as various headwinds continue to slow recovery from the lockdown-induced recession.
The rise in real gross domestic product reflected increases in consumer spending, exports, nonresidential investment, and government spending, according to an advance estimate released on Thursday by the Bureau of Economic Analysis. Growth was offset by decreases in private inventory investment and residential investment, as well as imports, which are subtractions in the calculation of gross domestic product.
The 1.1% growth rate in the first quarter of 2023 marks a decline from the 2.6% growth rate in the fourth quarter of 2022, as well as the 3.2% growth rate in the third quarter of 2022.
The economic data comes as inflationary pressures, largely induced by the supply chain bottlenecks and labor shortages which continue to follow the lockdown-induced recession, raise expenses, and diminish purchasing power for American consumers and businesses. Inflation reached 5.0% last month, according to data from the Bureau of Labor Statistics, marking relative relief from the 9.1% rate witnessed last summer even as prices for many items remain elevated and wage increases fail to keep pace with price levels.
