U.S. economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labour market. Gross domestic product increased at a 0.5 per cent annual rate, the weakest since the first quarter of 2014, the Labor Department said on Thursday in its advance estimate.
The economy was also blindsided by cheap oil, which has hurt the profits of oil field companies, resulting in business spending contracting at its fastest pace since the second quarter of 2009, when the recession was ending. “Although growth was weak to start the year, the soggy results are consistent with seasonal trends over the past decade. Expectations for growth for the remainder of the year remain bright,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
