The latest economic statement by Eric Van Nostrand, performing duties of Assistant Secretary for Economic Policy for the Treasury Borrowing Advisory Committee, highlights the current state of the U.S. economy as of April 29, 2024.
Van Nostrand noted that despite a slowdown in real GDP growth to 1.6 percent in the first quarter of 2024, the underlying demand from households and businesses remained strong. He emphasized that personal consumption and business fixed investment played crucial roles in supporting GDP growth, with residential investment showing significant acceleration.
Regarding the labor market, Van Nostrand pointed out that the average pace of payroll job creation accelerated in the first quarter of 2024. However, he highlighted a slight uptick in the unemployment rate to 3.8 percent in March, indicating ongoing imbalances between labor supply and demand.
In terms of inflation, Van Nostrand acknowledged that while headline inflation increased in the first quarter, it remained significantly below its peak in June 2022. He specifically mentioned that energy price inflation turned positive, and core inflation accelerated during the same period.
Looking ahead, Van Nostrand expressed the Biden Administration's commitment to expanding the economy's productive capacity through investments in clean energy, manufacturing, and infrastructure. He also highlighted potential risks to the economic outlook, including geopolitical tensions and persistently strong demand growth leading to higher inflation.
In conclusion, the statement points to a robust economy with strong growth in key sectors but also raises concerns about inflation levels that remain above the Federal Reserve's target. Van Nostrand's remarks underscore the importance of continued efforts to balance economic growth with price stability and address potential risks on the horizon.
