Financial turmoil and a dramatic fall in business investment meant GDP growth in the United States came in at its slowest rate in two years and missed economists' expectations of a 0.7 per cent expansion.
Consumer spending continued to power the recovery - expanding by 2.4 per cent between January and March. However, business investment collapsed by 5.9 per cent over the quarter as spending by oil and energy companies dried up as oil prices crashed to as low as $28 a barrel during the period.
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The picture confirms that the gains from cheap oil prices that would be expected, are failing to materialise - or, are not enough to offset weak confidence elsewhere in the economy.
"The very modest 0.5 per cent annualised gain in first quarter GDP, which represents a significant slowdown on the already moderate 1.4 per cent gain in the final quarter of last year, was due to a number of headwinds hitting in the economy," said Paul Ashworth, chief US economist at Capital Economics.
A line of optimism came from analysts who pointed to poor growth figures in the first quarter in recent years that the US economy had then been able to shake off between April and June.