Today’s GDP Report Not Only Showed Weak Economic Growth But Worrisome Inflation [Video]

Thursday’s report on the Gross Domestic Product (GDP) contained an ominous sign for inflation watchers. 

Inflation rose at an annualized rate of 3.4% in the first quarter, up from 1.8% in the fourth quarter of 2023, the Bureau of Economic Analysis said in the GDP report Thursday. That figure incorporates Personal Consumption Expenditures (PCE) data on inflation from January and February, which have already been made public, and from March, which won’t be released until Friday.

Federal Reserve policymakers closely watch PCE as an indication of the trajectory of inflation. The high quarterly figure signals inflation either accelerated in March or the figures for previous months were revised upward, economists said.

PCE inflation could be as high as a 0.5% increase in March from February, compared to the 0.3% consensus forecast made before the GDP report, Economist David Rosenberg, founder of Rosenberg Research and Associates, posted on social media platform X. 

If that prediction holds up, …