US economy stagnates in first quarter by cold weather and … – Reuters

By Lucia Mutikani

WASHINGTON (Reuters) – US economic growth slowed more than expected in the first quarter, as cold weather reduced consumer spending and energy companies, affected by lower prices, they decreased their investments, although there are signs that activity is recovering.

The gross domestic product (GDP) expanded at an annual rate of only 0.2 percent in the first three months of the year, on Wednesday, the Commerce Department said.

That it represented a significant decline from the 2.2 percent rate in the fourth quarter and marked the weakest measure within a year.

The strong dollar and a dispute in the ports of the West Coast, now resolved, also affected the expansion, the government said.

Economists polled by Reuters had expected a breakthrough at an annual rate of 1.0 percent.

While the weak GDP figures could affect markets financial, moderation of growth is probably not a true reflection of the current health of the economy, given the role of temporary effects such as climate and the port conflict.

“A stagnant economic growth in the United States earlier this year ruled out any imminent rise in interest rates by the Fed” said Chris Williamson, chief economist at Markit in London.

data First quarter GDP were released a few hours before the US Federal Reserve concludes a policy meeting two days. More …