US growth slowed sharply last quarter to 1.6% pace, reflecting an economy pressured by high rates

WASHINGTON (AP) — The nation’s economy slowed last quarter, growing at an annual rate of 1.6% in a sign that the high interest rates may be taking a toll on borrowing and spending. The gross domestic product — the economy’s total output of goods and services — decelerated from its brisk 3.4% growth rate in the final three months of 2023. Consumers continued to drive growth last quarter but slowed their spending. Growth was also held back down by businesses reducing their inventories. The state of the U.S. economy has seized Americans’ attention as the election season has intensified. Although inflation has slowed sharply, to 3.5% from 9.1% in 2022, prices remain well above their pre-pandemic levels.