U.S. Economic Growth for Q1 Revised Up Slightly to 1.4 Percent

The upward revision primarily reflected a downward revision to imports, which are a subtraction in the calculation of GDP, and upward revisions to nonresidential fixed investment and government spending. These revisions were partly offset by a downward revision to consumer spending, according to the report.

The latest data marks a significant slowdown in growth compared with the fourth quarter of 2023, when real GDP increased by 3.4 percent.

Compared to the previous quarter, the deceleration in real GDP primarily reflected decelerations in consumer spending, exports, and state and local government spending, and a downturn in federal government spending, said the report. These movements were partly offset by an acceleration in residential fixed investment.

At its two-day policy meeting earlier this month, the U.S. Federal Reserve kept interest rates in place and predicted one rate cut later this year, as the latest consumer price data showed that inflation seemed to be cooling.

"It looks like the conditions are taking shape for the Fed to start cutting interest rates. The U.S. economy is slowing, inflation is coming down towards the Fed's 2 percent inflation target, and strains are beginning to appear in the banking system," Desmond Lachman, a senior fellow at the American Enterprise Institute and a former official at the International Monetary Fund, told Xinhua.

Lachman, however, does not think that the Fed will want to cut interest rates on the eve of a presidential election "unless there are compelling reasons" to do so.

"This makes it likely that the Fed will only start cutting (rates) in November. That makes it likely that the Fed will once again be in a position where it will be doing too little too late to prevent a recession," he said.

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