(The Center Square) – Analysts with the Florida Bureau of Economic and Demographic Research say the U.S. economy is moving from above-trend growth seen in the fourth quarter of 2023 and first quarter of 2024 to below-trend growth.
“The shift from above-trend to below-trend growth is due to several factors, including the continuing effects of past monetary tightening, tougher lending standards for consumers and businesses, and a significant decline in stock prices,” state economic forecaster Beselka McCarney said at an economic forecasting conference on Friday.
An expected sharp slowdown in job growth did not materialize, with forecasters saying nonfarm job growth came in at 2% and 1.5%, respectively, faster than previous expectations of 0.5% and 0.3%.
Nonfarm payrolls increased 1.7% year over year, and the unemployment rate declined slightly to 1.4% as of June 2024. Unemployment remains at about 1.8 million, roughly the same as the figure reported at the last 2023 estimates meeting.
Real consumer spending growth was 3.3% in the fourth quarter and 1.5% in the first quarter of 2024, as expected. Consumer price inflation rose to a better-than-expected 3.8% in the first quarter. Previous estimates of consumer price inflation were for 2.1%.
Personal income rose a better-than-expected 7% in the first quarter, beating the 6.7% forecast. Wages and salaries increased 5.6%, beating the 4.7% forecast. The personal savings rate was 3.8%, below the 4.6% forecast, and remained at that level for the first two months of the second quarter of 2024.
Mortgage rates were lower than expected, at 6.76%, compared to 7% expected in the first quarter. Sales of existing family homes were higher than expected but still very low levels historically. Condo sales were also weaker than expected.
The median price of a single-family home is expected to fall more than expected in the fourth quarter of 2023 and the first quarter of 2024. Light vehicle sales and business investment remained close to expectations.
