WASHINGTON — Growth in the U.S. economy was a barely discernible 0.2 percent annual rate between January and March, the Commerce Department said Wednesday. That’s the poorest showing in a year.
Most economists expect growth to rebound, but it isn’t likely to be healthy. Several cut their second-quarter forecasts to 2.5 percent from 3.5 percent.
Here are the key first-quarter factors.
• WINTER WOES: Ethan Harris of Bank of America Merrill Lynch estimates bad weather in parts of the U.S. shaved 0.5 percentage points from growth. Consumer spending growth fell to just 1.9 percent, down from 4.4 percent the previous quarter. But spending should rebound now that the snow has melted.
• STRONG DOLLAR: Exports dropped 13.3 percent, the most since the first quarter of 2009. Imports rose slightly, widening the trade deficit and cutting 1.25 percentage points from growth. The strong dollar is partly to blame: It jumped 19 percent since June, making U.S. exports more expensive and imports cheaper. The dollar is expected to remain strong, possibly cutting growth this year by 0.5 percentage points, Harris forecasts.
