Washington, DC, United States (4E) – U.S. economic growth nearly stayed flat in the first quarter of 2014, the latest sign that the economic expansion that started nearly five years ago continues to be the weakest in the last several decades.
On an annualized basis, gross domestic product (GDP) inched up 0.1 percent from January through March, compared with the previous quarter’s gain of 2.6 percent, according to the Commerce Department report released Wednesday in Washington. Consumer spending provided the lone bright spot as American households spent more on health care and residential heating.
While the slowdown in growth was broadly expected, the weak performance in the first-quarter surprised many economists surveyed by The Wall Street Journal, who predicted the economy to grow at a 1.1 percent pace.
Consumer spending on goods rose by just 0.4 percent during the quarter, which marks the smallest increase since 2011, an indication that discretionary purchases have declined.
Wednesday’s report showed that increased household spending on services, which include health care and energy to heat homes, resulting to 3.0 percent rise in total consumer spending, slightly below the 3.3 percent growth in the fourth quarter.