GDP Report: US Economy Grows at 1.1% in Q1

Many businesses think so. Companies didn’t add inventory in the first quarter, a sign that they expect sales to slow in the coming months and don’t want to be stuck with products they can’t sell.

“Consumption is still strong, and businesses still don’t think they need to restock inventory because they think consumption will weaken,” said Megan Green, chief economist at the Kroll Institute. “So who’s right?”

At Nexgrill, a California-based seller of grills and other outdoor cooking equipment, sales of low-cost models under $500 have been strong so far this year, said Ramsey Hawfield, the company’s vice president. But sales of higher-priced products have slowed in recent months, with some consumers watching their budgets more closely, Mr. Hawfield takes over.

“A year or two ago they didn’t feel rich, and now they feel a little pinched and a little nervous,” he said. “The person who buys that $500 or $600 grill says, ‘Maybe I can get that $300 or $400 version.'”

Nexgrill is not laying off any workers, Mr. And it’s still investing in new products, Hawfield said. But it does so carefully, avoiding features that consumers may not consider worth the extra cost. Retailers are pushing Nexgrill and other brands to lower prices — something that was far less true a year ago, when consumers weren’t looking at price tags.

“They’re pushing us to say, ‘Let’s find a better price point,'” he said.

The gradual withdrawal of consumers has been welcomed by policymakers, who worry that continued free spending is fueling inflation. Consumer prices rose at an annual rate of 4.2 percent in the first quarter, faster than at the end of last year and above the central bank’s target of 2 percent, according to data released Thursday. Fed officials meet in Washington next week and are expected to raise rates for the 10th consecutive meeting.

Policymakers will get an updated reading on the economy on Friday when the Commerce Department releases income and spending data for March and the Labor Department releases data showing whether wage growth continued to slow in the first quarter. Purpose of central bank.