07232021

US economy saw slight contraction

snow in New York

A cold winter helped the US economy stall in the first three months of the year

The US economy contracted at an annual rate of 0.2% in the first quarter of the year after being hit by bad weather, spending cuts among energy firms and the strong dollar.

The latest figure is an upgrade from the previous estimate of a 0.7% contraction.

Despite the contraction, economists believe that by the end of the three month period growth was recovering.

By May, retail sales, housing and employment figures had all improved.

Consumer spending, which accounts for some two thirds of the US economy, grew at an annual rate of 2.1% in the first quarter, faster than earlier estimates of just 1.8%.

The new figures were in line with economists’ expectations and follow an annual growth rate of 2.2% in the fourth quarter of 2014.

But the strong dollar and a dispute with workers in the West Coast ports also meant that the trade gap widened in the first quarter. Imports increased by 7.1% while exports fell 5.9%.

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