The U.S. grew at a meager 0.2% annual pace in the first three months of 2015, a period marked by severe weather, a major port dispute and a soaring dollar that curbed American exports. Consumer spending, the main engine of growth, slowed sharply to 1.9%, below the average 2.3% increase since the recovery began in mid-2009. Business investment in "structures" such as mining shafts and wells sank 23.1% in the first quarter, reflecting lower spending by U.S. energy companies seeking to cope with suddenly cheap oil. Other companies also cut back on investment amid a surge in the dollar that's made U.S. goods and services more expensive to sell outside the nation's borders. Exports tumbled 7.2% while imports edged up 1.8%. A bigger trade deficit subtracts from GDP. Spending on new home construction, meanwhile, rose a scant 1.3% as severe weather hampered builders. The value of inventories, which adds to GDP, increased by a surprisingly large $110.3 billion, the Commerce Department said. Inflation as measured by the PCE price index fell at a 2% annual pace, though the core rate that excludes food and energy rose at 0.9% clip.
Copyright © 2015 MarketWatch, Inc.
Continue Reading Below