WASHINGTON, D.C. – Falling far short of expectations, America’s economy grew by just 1.6 percent in the first quarter of 2024, according to a new Gross Domestic Product (GDP) estimate from the Bureau of Economic Analysis. The report also showed bad news for those hoping for relief from high prices and high interest rates: The personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, rose 3.4 percent year over year in the first quarter, its biggest gain in a year. Core PCE prices rose at a 3.7 percent rate – well above the 2 percent target rate that would have been necessary for the Federal Reserve to consider lowering interest rates.

“Given such a disastrous GDP report showing families and small businesses can’t get relief, why is President Biden standing by his promise to raise their taxes when they can least afford it?

“With consumer spending slowing and inflation accelerating with surging prices, it’s less likely the Federal Reserve is going to let up its fight against inflation and cut interest rates this year as many had hoped. This Administration’s reckless spending is pushing the American dream further and further out of reach.

“House Republicans have made our plans clear: Provide tax relief, support families and Main Street, and strengthen America’s economy. Senate passage of the Tax Relief for American Families and Workers Act would be a major first step, building on the foundation of the successful Trump tax cuts that led to the strongest American economy in generations. As we look to next year, the Ways and Means Committee’s newly formed Republican tax teams are already hard at work identifying solutions that will help families, workers, and small businesses struggling in the Biden economy.”

READ: Ways & Means Chairman Smith and Tax Subcommittee Chairman Kelly Announce Tax Teams to Avert 2025 Tax Cliff

Background:

• The Bureau of Economic Analysis released its first estimate of Gross Domestic Product (GDP) for the first quarter of 2024 on Thursday showing much lower-than-expected growth at 1.6 percent. Expectations were nearly a full point higher.

• The personal consumption expenditures (PCE) price index, a key inflation variable for the Federal Reserve, rose 3.4 percent year-over-year for the quarter. 
• This is the biggest gain in a year and up from 1.8 percent in the fourth quarter. 

• Core PCE, which excludes food and energy, showed prices rose at a 3.7 percent rate.
• The Federal Reserve sets a target of 2 percent inflation to determine whether to raise or lower interest rates.