Where is the Growth?
The Commerce Department reported today that the US economy grew at a disappointing rate of just +0.1% for the first quarter of 2014. Estimates had called for an increase of about +1.0%. This compares to some rather strong data seen in the last two quarters: 4th quarter of 2013 (+2.6%) and 3rd quarter of 2013 (+4.1%). Before we read too much into this poor performance lets take a look at where growth was hampered. First, businesses restocked inventories at a much slower rate this quarter after adding over $110 billion in the 4th quarter of 2013 - the slowing of inventory growth sliced about 0.60 from GDP growth in the first quarter. Secondly, exports fell about 7.6% during the quarter which resulted in a further reduction of about 0.8% from GDP.
The elephant in the room is still the feeling that the harsh winter has resulted in just a temporary slowdown and not a halt to the ongoing recovery here in the US. Time will tell. The second reading of first quarter GDP will be released on May 29, 2014.
http://finance.yahoo.com/news/u-economy-stalls-q1-inventories-130619966....
