April 25, 2024

President Joe Biden’s hot streak of success on the economy hit an unexpected detour Thursday, as a government report showed growth was slower than forecast and prices higher.

GDP grew at a 1.6 percent pace in the first three months of the year — less than half the pace of the previous quarter and far slower than economists had predicted — with a particular drag coming from the trade deficit as a strong dollar hurt exports.

The report comes as the Federal Reserve is actively trying to slow the economy in its bid to tame price spikes, but a potentially troubling trend is that progress toward the central bank’s 2 percent inflation target has also stalled after making considerable headway in 2023. That bolsters the case for the Fed to hold off on interest rate cuts, keeping pressure on the economy, and also gives Republicans a fresh talking point in an election year.

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