The US economic expansion faltered badly in the first quarter with gross domestic product rising by a sluggish 0.2 per cent annual pace, which could influence policy makers’ decision on when to lift interest rates.
The growth figure was a fraction of the 1 per cent rate of expansion predicted by economists, and marked a sharp slowdown from the 2.2 per cent recorded for the fourth quarter of 2014 and the 5 per cent expansion in the third. A freezing winter and port strikes were partly to blame, while factors such as the surging dollar and deep drop in oil-related investment will have a longer-lasting effect on the economy.
The Department of Commerce numbers came as Federal Reserve policy makers met to debate when to raise short-term interest rates. Officials have taken a more cautious tack in recent weeks amid signs of soggier growth and weaker corporate hiring in March. The dollar fell to a near two-month low after the GDP figures were released.