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US Economy Contracts 0.5% in Q1 2024: Key Insights for Competitive Exams

Staying updated with current affairs like the US economic slowdown is essential for easy preparation in competitive exams. This complete guide breaks down the latest GDP data, its implications, and how online preparation on MyEntrance.in can help you master such topics effortlessly.

Why is This Important for Exams?
Questions on global economic trends, GDP fluctuations, and trade policies frequently appear in exams like SSC, PSC, Banking, NID, NIFT, and UPSC. Understanding these concepts helps in:
General Awareness sections
Economy-based MCQs
Essay and Descriptive Papers
Interview & Group Discussion Rounds

US Economy Shrinks 0.5% in Q1 2024: Key Highlights
The US economy contracted at an annual rate of 0.5% in the first quarter of 2024, worse than the previously estimated 0.2% decline. Here’s what happened:
Trade Wars Disrupted Growth: President Trump’s tariffs led to a surge in imports as businesses rushed to stock foreign goods before new duties applied.
Imports Skyrocketed by 37.9%, the fastest since 2020, dragging GDP down by nearly 4.7 percentage points.
Consumer Spending Slowed Sharply, indicating weaker domestic demand.
Federal Spending Dropped 4.6%, the steepest fall since 1986.

Why Imports Reduce GDP:
GDP measures only domestic production, so imports (though counted initially in spending) are subtracted to avoid inflating the numbers. This mathematical adjustment explains the decline.
Future Outlook:
Economists expect a 3% rebound in Q2 2024, as the import surge was a one-time event. The next GDP report releases on July 30.

Sample Questions & Answers for Competitive Exams
Q: What was the US GDP growth rate in Q1 2024?
A: -0.5% (contracted).
Q: Why did imports surge in Q1 2024?
A: Businesses rushed to import goods before new tariffs were imposed.
Q: How much did imports contribute to the GDP decline?
A: Nearly 4.7 percentage points.
Q: What was the drop in federal spending in Q1 2024?
A: 4.6%, the biggest decline since 1986.
Q: When is the next US GDP report due?
A: July 30, 2024.

How to Prepare for Entrance Exams?
Struggling with current affairs and economy-based questions? MyEntrance.in offers the most predicted questions, mock tests, and expert-curated study materials to help you crack SSC, PSC, NIFT, NID, and other exams with confidence.
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