Cold weather sees huge US growth miss in first quarter

 
Peter Spence
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US growth has ground to what is nearly a halt.

At an annualised 0.1 per cent in the first quarter, GDP growth is well below the 1.2 per cent analysts were expecting.

Clearly the weather is colder than we thought. The US grew at an annualised rate of 2.6 per cent in the last quarter of 2013.

Thankfully, personal consumption boomed during what turned out to be one long snow day. Consumer spending on services showed its biggest gain since 2000 this quarter.

If you want to compare that annualised first quarter growth with the UK's, then the UK's first quarter growth of 0.8 per cent corresponds to annualised growth of 3.2 per cent.

Paul Ashworth, chief US economist at Capital Economics, notes that the monthly data for March has been showing improvement, and so we can hope for a big rebound in US growth next quarter.

"We anticipate that second-quarter GDP growth will rebound to 3.5 per cent and we don't expect these figures to affect the pace of the Fed's QE taper," says Ashworth.