US economy slows to mere 0.1% growth in first quarter

WASHINGTON, United States - The US economy barely grew in the first 3 months of the year amid severe winter weather, official data showed Wednesday, April 30.

Gross domestic product increased 0.1% after hitting a 2.6% pace in the 2013 fourth quarter, the Commerce Department said.

The slowdown was much sharper than expected, with most analysts having forecast a 1.0% pace.

The slump was driven by a downturn in exports and business investment and a larger decrease in inventory investment.

Another key factor was a slowdown in consumer spending, which accounts for about two-thirds of US economic activity. Spending fell mainly on nondurable goods, like clothing and food and beverages, while it picked up for utilities and healthcare.

The Commerce Department did not comment on the reasons behind the slowdown, but the Federal Reserve has repeatedly said that bad winter weather in much of the country was partly to blame. - Rappler.com