Washington CNN  —  US economic data released Thursday was broadly disappointing. America’s economy expanded at a weaker pace earlier this year than initially reported. The decline in home sales based on contract signings last month was much steeper than economists expected. And mortgage rates inched higher this week, thrusting the average rate back above the psychological 7% threshold. Treasury yields slipped after the release of the government’s latest measure of economic growth in the first quarter, which also showed that consumer spending was softer than previously estimated. The benchmark 10-year US Treasury yield slid below 4.6%. Thursday’s batch of economic figures shows that the economy isn’t heating back up and has instead struggled under the weight of the highest interest rates in more than two decades. And while Thursday’s indicators point to some economic pressure being felt by American consumers, it also bodes well for an eventual lowering of high borrowing costs. This silver lining is especially important after the slowdown in inflation stalled in the first quarter. Signs of inflation being stuck raised fears that the Federal Reserve could hike rates again this year or not cut them at all. Now, the possibility of rate cuts happening sometime in 2024 is back in the conversation. And the latest GDP data also showed that inflation in the first quarter was revised lower, including a measure that excludes volatile food and energy prices. That also helps strengthen the case for rate cuts. “Monthly data beyond March generally point to a continued, albeit gently cooling, economic expansion,” Oren Klachkin, financial markets economist at Nationwide, said in a note Thursday. “Some warning signs regarding the economic outlook are visible beneath the surface, but nothing that makes us pessimistic about the road ahead.” Economic growth The Commerce Department’s second estimate of first-quarter gross domestic product, which measures all the services and goods produced in the economy, registered at a 1.3% annualized rate, down from the 1.6% reflected in the first estimate. That was largely due to a downward revision to consumer spending, which accounts for about 70% of the US economy. Spending advanced 2% in the January-through-March period, compared to the initial rate of 2.5%. The latest GDP report also showed that corporate profits, before taxes, fell 0.6% in the first quarter, the first decline in a year and down sharply from the 4.1% increase in the prior three-month period. Still, while most corporate earnings results this quarter proved decent, companies indicated it’s become increasingly difficult for them to pass on costs to consumers. Housing Housing data released Thursday mostly showed that the market remains tough, especially for first-time buyers. Scaffoldings are set up around single-family residential homes under construction in San Marcos, California, U.S., March 25, 2024. REUTERS/Mike Blake Mike Blake/Reuters Related article Americans say it’s the worst time ever to buy a home The standard 30-year fixed-rate mortgage averaged 7.02% this week, up slightly from last week’s average of 6.94%, according to Freddie Mac data. Mortgage rates are higher than anything seen in the decade leading up to 2022, when the Fed began to hike rates in a bid to tame inflation. They’re not expected to fall meaningfully anytime this year because inflation is still stubbornly elevated. So long as this remains the case, the Fed isn’t likely to reduce rates by much in 2024 — at least not enough to give Americans a break. The Fed doesn’t directly set mortgage rates, but its actions, which influence yields, do. Mortgage rates track the 10-year yield. Pending home sales slumped 7.7% in April to a reading of 72.3, the lowest level in four years, according to data from the National Association of Realtors released Thursday. Despite some welcome improvement in housing supply over the past few months, tough borrowing costs are spooking buyers and keeping the country’s housing market frozen. “The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” Lawrence Yun, NAR’s chief economist, said in a statement. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.” Jobs Weekly data on applications for jobless benefits, released every Thursday and often seen as the earliest sign of any shift in the job market, hasn’t been concerning, but they’ve been trending higher over the past few weeks. There were 219,000 first-time claims filed during the week ended May 25, according to Labor Department data released Thursday. Last week’s filings were up by 3,000 from the upwardly revised tally the week before but were mostly in line with economists’ forecasts. Matt Egan breaks down the U.S. jobs numbers with Rahel Solomon. Clipped From Video video Related video U.S. jobs report comes in softer than expected Economists were expecting 218,000 initial claims, according to FactSet consensus estimates. Continuing claims ticked higher by 4,000 to 1.791 million for the week ended May 18. The four-week average of 222,500 is the highest since mid-September of last year. Weekly jobless claims data, considered a proxy for layoff activity, can be highly volatile and is frequently revised. The Dow closed 331 points lower, or 0.9%. The S&P 500 was down 0.6% and the Nasdaq Composite dropped 1.1% Thursday. CNN’s Alicia Wallace contributed to this report.