US economy slows unexpectedly

Updated June 9, 2023 at 1:07 AM

Welcome to The Hill’s Business & Economy newsletter


The Big Story 

Why the economy is slowing down

Experts knew the economy slowed down in the start of 2023. They just didn’t realize it slowed that much.

The U.S. economy grew far slower than economists expected in the first quarter of 2023, according to data released Thursday by the Commerce Department.

Gross domestic product (GDP) rose at an annualized rate of 1.1 percent in the first quarter, well below the 2 percent growth rate projected by economists and the 2.6 percent rate from the fourth quarter of 2022.

A rush of early-year consumer spending helped keep the economy firmly out of recession during the first quarter. But a steep decline in business spending and investment took a serious chunk out of growth.

The unexpectedly steep slowdown in economic growth is the latest sign of the U.S. economy feeling the brunt of stubborn inflation and steep Federal Reserve rate hikes.

The aftermath of the March banking crisis and fears of another financial crunch are also slowing the economy through steeper borrowing costs and less consumer confidence.

“The US economy is unwell, and it’s starting to show,” wrote EY chief economist Greg Daco in a Thursday analysis.

“Further softening in the job market in coming months — the last remaining leg propping up the consumer — will likely trigger a pullback in personal consumption,” he wrote.

We have everything you need to know about the state of the economy at

Welcome to The Hill’s Business & Economy newsletter, we’re Aris Folley and Sylvan Lane — covering the intersection of Wall Street and Pennsylvania Avenue.

Essential Reads 

Key business and economic news with implications this week and beyond:

Lyft’s latest round of layoffs announced last week will include more than 1,000 job cuts in what the ride-sharing company says is an effort to cut costs.

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Federal Reserve Chairman Jerome Powell was fooled by a Russian duo pretending to be Ukrainian President Volodymyr Zelensky in a fake interview broadcast on Russian television, the central bank confirmed Thursday after multiple media reports.

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A new survey of Deferred Action for Childhood Arrivals (DACA) recipients is highlighting the policy’s significant positive economic impact on its beneficiaries.

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The Ticker 

Upcoming news themes and events we’re watching:

  • The Commerce Department on Friday will release the latest personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure.

  • The Senate Finance Committee will hold a hearing next Wednesday focused on barriers to mental health care.

In Other News 

Branch out with more stories from the day:

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SACRAMENTO, Calif. (AP) — California approved Thursday a first-in-the-nation, ambitious rule limiting rail pollution to aggressively cut greenhouse gas emissions in the state’s latest move to establish itself as a global leader in the fight against climate change.

Good to Know 

Business and economic news we’ve flagged from other outlets:

  • Dow jumps 500 points on strong earnings, heads for best day since January (CNBC)

  • Priced Out of Florida, More Retirees Are Trying This Sunbelt State on For Size (The Wall Street Journal)

  • Snapchat’s new AI chatbot is already raising alarms among teens and parents (CNN)

What Others are Reading 

Top stories on The Hill right now:

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Former Vice President Mike Pence appeared Thursday before a federal grand jury investigating former President Trump’s efforts to remain in power after the 2020 election, a source familiar with the matter confirmed to The Hill. Read more

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Senate Republicans on Thursday blocked a measure that would have allowed the Equal Rights Amendment (ERA) to be added to the Constitution. Read more

What People Think 

Opinions related to business and economic issues submitted to The Hill:

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Originally published April 27, 2023 at 5:50 PM