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US economy slowed to 0.1 per cent growth rate in Q1, weakest in year, reflecting harsh winter

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The Amsterdam-bound Fortunagracht is loaded with road equipment in Cleveland, on April 21, 2014 . THE CANADIAN PRESS/AP, Tony Dejak

WASHINGTON – The U.S. economy slowed drastically in the first three months of the year as a harsh winter exacted a toll on business activity. The sharp slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer weather.

The Commerce Department says growth slowed to a barely discernible 0.1 per cent annual rate in the January-March quarter, the weakest since the end of 2012 and down from a 2.6 per cent growth rate in the October-December quarter.

Consumer spending grew at a 3 per cent rate. But the gain was dominated by a 4.4 per cent rise in spending on services, reflecting higher utility bills. Spending on goods barely rose. Also dampening growth were a drop in business investment, a rise in the trade deficit and a fall in housing construction.

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