US Economy at Zero Growth According to Atlanta Fed

Thu, Apr 2, 2015 - 8:07am

As was the case a year ago when harsh winter weather visited the East Coast, the first quarter of 2015 is turning out to be something of a bust GDP growth-wise as evidenced by the Atlanta Federal Reserve’s GDPNow forecast shown below.

Bolstering the argument that this was a weather-related slowdown, about a quarter of the recent decline can be attributed to shrinking fixed investment in structures by businesses (though, countering that argument is the lack of a similar decline in residential building).

A widening trade gap accounts for another quarter of the drop but, despite the conventional wisdom of the impact of sharply lower energy prices, it was consumption – America’s growth engine – that accounted for about half of the overall decline since this data series began in January, all of which suggests the growth slowdown may not be a transitory.

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