Editor’s note: This story has been updated to correct an error in Personal Consumption Expenditure data.

The U.S. economy grew in the first quarter of the year, albeit at a markedly slower pace compared to the final quarter of 2023 and below economists’ predictions.

The annualized growth rate of the Gross Domestic Product (GDP) stood at 1.6% for the recently concluded quarter, according to the advanced estimates released by the Bureau of Economic Analysis on Thursday.

Q1 2024 GDP: Key Highlights

A growth rate of 1.6% in Q1 marks a notable slowdown from the 3.4% in the final quarter of 2023, and it fell short of the forecasted 2.5% growth according to the economist consensus.

Core Personal Consumption Expenditure (PCE) price index – Fed’s favorite inflation gauge – rose from 3.4% in Q4 2023 to 3.7% in Q1 2024, beating the expected 2%.

Headline PCE price rose from 1.8% in Q4 2023 to 3.4%

Real consumer spending growth slowed from 3.5% to 2.5%, below the expected 2.8%.

Market Reactions

The U.S. dollar index (DXY), as tracked by the Invesco DB USD Index Bullish Fund ETF , inched higher by 0.1% minutes after the GDP print.

Treasury yields slightly rose by approximately 3 basis points across the curve, with the policy-sensitive 2-year yield rising to 4.95%, as traders bolstered their expectations for fewer and delayed Fed rate cuts in light of the higher-than-expected inflation figures.

Gold, as tracked by the SPDR Gold Trust , went up 0.5%

During Thursday’s premarket trading, futures on major U.S. indices were all in the red, driven by a sharp drop of about 15% in tech giant Meta Platforms Inc. ( META ) following the issuance of a weak revenue guidance for the second quarter, overshadowing the company’s better-than-expected first quarter results.

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