Washington (AFP) – The U.S. economy ground almost to a halt in the first three months of the year amid severe winter weather, official data showed Wednesday.
Gross domestic product increased at an annual rate of 0.1 percent after hitting a 2.6 percent pace in the 2013 fourth quarter, the Commerce Department said.
While analysts had expected some slowing after monthly data suffered under an unusually heavy barrage of winter storms, the slowdown was much worse than the 1.0 percent growth rate expected.
It was the slowest growth since the last quarter in 2012. The world’s largest economy has been losing steam for some time, with full-year GDP growth slowing to 1.9 percent in 2013 from 2.8 percent in 2012.
A World Bank report Tuesday said that China’s rapidly expanding economy could leapfrog the United States this year to take the top ranking.
The Bank said that when comparing output on a purchasing-power basis, the Asian behemoth was breathing down the neck of the U.S., which has dominated the world economy for over a century.
Driving the first-quarter U.S. growth slump were falling exports and business investment and a larger decrease in inventory investment, the Commerce Department said. Exports dived 7.6 percent after a 9.5 percent rise in the fourth quarter.
Spending fell mainly on nondurable goods, like clothing and food and beverages, as consumers hunkered down inside.
Spending picked up for utilities, with heating bills shooting up during the winter freeze, as well as for healthcare as people signed up for insurance coverage under President Barack Obama’s Affordable Care Act health reform.
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