Cold weather froze the U.S. economy in its tracks in the first three months of the year, with GDP falling to just 0.1% thanks to slowing investment and housing spending
The U.S. economy slowed dramatically in the first quarter of 2014, as severe winter weather across much of the country depressed business investment and home construction.
The economy’s meager 0.1% GDP growth in January, February and March represented the slowest three-month growth in the economy since the end of 2012, and a sharp deceleration from growth in the second half of 2013, when the economy grew at a 3.4% rate.
The data reported by the Commerce Department early Wednesday fell far short of the expectations of Wall Street economists, who had predicted a 1.2 percent rate of growth this quarter, the New York Times reports.
Consumer spending, the biggest driver of economic growth in the United States, actually grew 3.0 percent in the first quarter, nearly consistent with 2013′s fourth quarter growth of 3.3 percent. But nonresidential investment decreased dramatically, as did did exports of goods and services.
But economists expect the economy’s growth rate to return to between 2.5 and 3 percent in 2014, the Times reported, and say that much of the hit in the first quarter was due to inventory growth in the end of 2013 and seasonal factors.