Economic growth in the United States increased just 0.5 percent, the slowest pace since the first quarter of 2014, according to the Labor Department. Bobbi Rebell reports.
The U.S. economy hit the breaks in the first quarter, increasing just half a percent. Consumer spending softened and the strong dollar continued to undercut exports. The result: Economic growth was at its slowest pace in two years. Almost all sectors of the economy weakened in the first quarter, with the housing market the only exception. Among the many challenges: cheap oil that hurt profits of oil field companies, and that led to lower business spending. Economists also point out that the government model does not account properly for seasonal patterns. Brian Schaitkin, Senior Economist, at The Conference Board saying: "These results understate the overall health of the economy. The labor market remains strong with unemployment remaining low and more workers returning to the labor force. Since the end of the Great Recession, even on a seasonally adjusted basis, first quarter GDP growth figures have shown a consistent pattern of being weaker than those for the rest of the year, which suggests that a small rise is in store in 2016." A separate report showed weekly jobless claims rose slightly, but the four-week average is still at its lowest level since 1973.