US growth slowed sharply last quarter to 1.6% pace, reflecting an economy pressured by high rates

By PAUL WISEMAN
AP Economics Writer

WASHINGTON (AP) — The nation’s economy slowed sharply last quarter to a 1.6% annual pace in the face of high interest rates, but consumers — the main driver of economic growth — kept spending at a solid pace. The gross domestic product — the economy’s total output of goods and services — decelerated from its brisk 3.4% growth rate in the final three months of 2023. A surge in imports, which are subtracted from GDP, reduced first-quarter growth by nearly 1 percentage point. Growth was also held back by businesses reducing their inventories. Both those categories tend to fluctuate sharply from quarter to quarter. By contrast, the core components of the economy still appear sturdy.