The country’s gross domestic product rose just 0.2% in the first quarter of 2015, down from 2.2% in the fourth quarter, due to lower consumer spending in the harsh winter, sharp downturns in exports hampered by the strong dollar, and a labor dispute at West Coast ports. Lower oil and gas drilling investment was also a major contributor, the Commerce Department said Wednesday.
Exports fell 7.2% in the first quarter, in contrast to an increase of 4.5% in the fourth quarter. Investment in nonresidential structures — including oil and gas drilling — plunged 23.1%, compared with a 5.9% rise the quarter before. Consumer spending slowed to a 1.9% increase in the first quarter, compared with a rise of 4.4% in the quarter ending 2014.
GDP also got off to a slow start in 2014, with the U.S. economy actually contracting 2.1% a year ago.
A CBS News article Wednesday said that economists expect growth will rebound to around 3% this quarter and hold steady in the second half of the year, as job gains and consumer spending increase.
“The Great Recession ended nearly six years ago in June 2009, but growth since the recovery began has been sub-par, averaging just 2.25,” CBS News wrote. “Despite the weak start, analysts believe 2015 will be the year when growth accelerates to a more respectable level.”
Still, the poor first-quarter numbers will likely delay any interest rates increases by the Federal Reserve Open Market Committee until at least September, analysts said.
“A stalling of U.S. economic growth at the start of the year rules out any imminent hiking of interest rates by the Fed,” Markit chief economist Chris Williamson wrote in a research report.