The U.S. economy suffered sluggish growth in the first quarter of 2015 with its gross domestic product recording a mere 0.2 percent increase, as reported by the Commerce Department in its preliminary estimate on Wednesday.
“The U.S. economy stumbled badly in the first quarter,” Scott Anderson, chief economist at Bank of the West, said, according to CNN.
Harsh winter season, strong dollar and labor disputes at the West Coast ports that resulted in dramatic slowdown in shipping are being attributed to the cooling down of the American economy.
The first quarter’s GDP was much lower than the economists’ expectations of 1 percent.
There was a similar slump witnessed in the first three months of 2014, but the economy bounced back. However, this year, economists predict that such growth is unlikely owing to the weakness witnessed in global economy, especially Asia, and a strong U.S. dollar weighing on experts.
According to International Business Times, Srinivas Thiruvadanthai, director of research at the Jerome Levy Forecasting Center, said, “With these three things all taken together, the underlying trend of the U.S. economy is weaker than it was last year, and because of that, you’re not going to see the economy bounce back as quickly as it did last year.”
The biggest fall in any category of the GDP was endured by investments in structures, which include renovations and new office buildings, recording a 23-percent slump in the first quarter.
U.S. businesses overseas were vastly affected. Port strikes on the West Coast and strong dollar were principal reasons why exports slid down by 7 percent. A strong dollar value makes American products more expensive overseas, thereby hurting sales.
However, the economy slowed down largely because of harsh winter. Flights were cancelled and several businesses closed down because of huge amounts of snow falling in certain parts of the U.S.
Marie Schofield, chief economist at Columbia Threadneedle Investments in Boston, said, “The economy is just stalled.
“The Northeast and the Midwest were hit really hard by weather.”
According to Al Jazeera America, a forecast drawn by the International Monetary Fund earlier this month said that the U.S. economy would see a growth of 3.1 percent in this year. If that happens, it will be the first time since 2005, a couple of years before the country slipped into economy recession, that America will see such strong annual growth rate.
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