Economic Slowdown in Q1 of 2015

America’s economy was relatively stagnant the last quarter as the nation experienced a meager .2 percent growth in GDP according to data recently released by the Commerce Department. Economists attribute this to severe winter weather and energy companies dealing with low prices.

Chair of the Fed, Janet Yellen

Chair of the Fed, Janet Yellen

The US economy ended 2014 on a strong note as the country’s Gross Domestic Product rose more than two percent in the final quarter. This marks the slowest growth rate since 2013.

The Commerce Department also attributes the slowdown to a particularly strong dollar, as well as a labor dispute that halted activity as usual for some ports on the western coast.

Many economists expect that these numbers will delay the Feds move to increase interest rates for the time being even though there are indications that the US economy may rebound in the second quarter of 2015.

Diane Swonk, a prominent economist out of Chicago, note stat the American economy has prove that it can be self-sustaining before the Fed implements any hikes. Previously, many believed such a move would occur in June, but it will surely be delayed until some point later in 2015 according to Swonk.

Some economists such as Scott Anderson are still optimistic for 2015 as he believes the slowdown is due to fleeting issues, and is not truly indicative of the health of the American economy. Economists are estimating that the rough winter weather knocked down the quarterly GDP growth by as much as .3 percentage points. This is evident in the downturn of consumer speeding, which generally accounts for around 66% of activity in the American economy. This growth rate of consumer spending in Q1 dropped to 1.9% percent, a steep step down from the 4.4 percent posted in the previous quarter.

The construction sector also performed poorly, as did domestic oil producers. Let’s see if the US economy can make a robust rebound going forward.