The U.S. economy has been surprisingly resilient in the face of aggressive interest rate hikes and stubborn inflation over the past year, but it started to show signs of wear and tear in the first quarter. Annualized U.S. gross domestic product growth slowed to 1.1%, the Bureau of Economic Analysis (BEA) reported Thursday, well below consensus expectations on Wall Street for 1.9%. At the same time, one of the Federal Reserve’s favorite inflation gauges, the personal consumption expenditures (PCE) index, increased to 4.2%, higher than the expected 3.7%.
“This morning’s data was the worst of both worlds, with growth down and inflation up,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance.
