Warmer Weather, Hotter Sales?

Analysts blamed winter weather and a strong US dollar for the anemic 0.2% gain posted by the US economy in the first quarter of 2015. Last year, the economy increased 3%.

At the same time, the surging US dollar, coupled with weakness among US trading partners, cut GDP growth by 1%, according to figures released by the government’s Bureau of Economic Analysis. Exports dropped $39 billion in the first quarter.  On the flip side, inventory growth was particularly strong, adding 0.75 percentage points to GDP.

Looking ahead, steady consumer spending, fueled by a surge in hiring over the past few years and a plunge in gasoline prices, is expected to keep the economy on track for stronger growth in Q2 and beyond. Most economists predict a rebound soon in a replay of what happened in 2014, when a 2.1% decline in first-quarter GDP spawned by winter weather was followed by outsized gains of 4.6% and 5% in the spring and summer.