THE US economy actually contracted during the freezing weather at the start of this year, according to official statistics which revised the country’s GDP figures down.
Initial estimates suggested that GDP rose by 0.1 per cent during the first three months of 2014, but the fresh projection yesterday showed that the economy shrank by one per cent on an annualised basis during the first quarter. It is the first contraction for the economy in three years, since a similar dip at the beginning of 2011.
Despite the dreary figures, many analysts shrugged off the news and put the dip down to the weather.
“Frustratingly, policymakers will therefore have to wait until the second half of the year to get a true reading of the underlying growth momentum and, most importantly, an idea of when the economy will be able to cope with higher interest rates,” said Chris Williamson, chief economist at Markit.