Growth in the U.S. economy slowed dramatically to just 0.1 percent in the January-March quarter, due in part to the harsh winter, the Commerce Department said Wednesday. It’s the weakest growth since the end of 2012.
The GDP figure was down from the 2.6 percent growth seen in the final quarter of 2013.
The Bureau of Economic Analysis said a drop in exports and business investment, especially on transportation equipment, computers and peripherals and a fall in housing construction — tied to the weather — were also major factors.
The sharp slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer weather, The Associated Press says.
Consumer spending grew at a 3 percent rate. But the gain was dominated by a 4.4 percent rise in spending on services, reflecting higher utility bills, The according to the AP.
The Wall Street Journal wrote in a preview of the numbers:
It was the coldest December-to-February stretch in four years across the 48 contiguous U.S. states, and the country then shivered through its chilliest March since 2002. That hurt. Many economists have blamed unusually cold and snowy weather, especially across the eastern U.S., for weak patches this winter in retail sales, factory production and other economic data.
The latest BEA report comes as the ADP National Employment Report said that private sector employment increased by 220,000 jobs in the March to April period.
The report is derived from ADP’s actual payroll data and measures the change in total non-farm private employment each month on a seasonally-adjusted basis.
The Federal Reserve’s policy-making committee will conclude a meeting on Wednesday after which it is widely expected to announce $10 billion cut in its monthly bond purchases as part of its tapering off of the stimulus. [Copyright 2014 NPR]