U.S. Economic Growth Slows to 0.2 Percent, Grinding Nearly to a Halt

The U.S. economy ground nearly to a halt in the first three months of the year, according to government data released Wednesday morning, as exports plunged and severe winter weather helped keep consumers indoors.

The gross domestic product grew between January and March at an annualized rate of 0.2 percent, the U.S. Commerce Department said, adding to the picture of an economy braking sharply after accelerating for much of last year. The pace fell well shy of the 1 percent mark anticipated by analysts and marked the weakest quarter in a year.

The economy had expanded at a rate of 2.2 percent in the final three months of 2014 and at a rate of 2.4 percent for the year.

Economists, employers and policymakers now face the challenge of determining whether the slowdown is temporary — stemming mostly from an unusually snowy winter in the Northeast — or a sign of broader problems.

Hours after the fresh data was released the Federal Reserve said that winter slowdown was “in part” reflective of “transitory factors” and that “economic activity will expand at a moderate pace” going forward. Economists expect that the central bank will hold off until the second half of the year, gauging the direction of the economy, before raising interest rates for the first time in 6½ years. In its statement Wednesday, the Fed did not offer any new hints about the timing of its rate hike. (Read more from “U.S. Economic Growth Slows to 0.2 Percent, Grinding Nearly to a Halt” HERE)

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