(The Center Square) – Analysts from the Florida Office of Economic and Demographic Research state the U.S. economy is transitioning to a below-trend growth from an above trend growth seen in the last quarter of 2023, and the first quarter of 2024.
“The switch from above trend to below trend growth is driven by several factors, ongoing effects of past monetary tightening, tightening of lending standards on loans to consumers and businesses…and a strong cessation in equity values,” said Vesselka McAlarney, a state economic forecaster during Friday’s economic estimating conference.
An expected sharp deceleration in job growth did not materialize, according to forecasters, nonfarm job growth was 2% and 1.5% over previous estimates of 0.5% and 0.3%.
Nonfarm payroll employment increased by 1.7% over the year, and the unemployment rate remained slightly lower, sitting at 1.4% in June 2024. Around 1.8 million people continued unemployment, almost identical to what was reported at the previous estimating conference in 2023.
Real consumer spending growth in the fourth quarter was 3.3%, and grew 1.5% in the first quarter of 2024 as expected. Consumer price inflation was higher than expected for the first quarter at 3.8%, previous estimates had consumer price inflation at 2.1%.
Personal income grew faster than expected in the first quarter at 7% than the expected 6.7%. Wages and salaries grew at 5.6%, topping the expected 4.7%. Personal savings rates were 3.8%, lower than the expected 4.6%, and maintained that into the first two months of the second quarter 2024.
Mortgage rates were lower than expected, sitting at 6.76% in the first quarter rather than the estimated rate of 7%. Existing family home sales were up higher than expected, however, are still at very low levels historically. Condominium sales were also weaker than expected.
The median single-family home price declines more than expected in the fourth quarter of 2023 and first quarter of 2024. Light vehicle sales remained close to expectations, as well as business investment.