Deficit and Gas Prices Lead to Slow Economic Growth
According to the Commerce Department, the economy’s growth fell to its slowest rate in two years at 3.1% in the first quarter.
This is tied to the trade deficit widening and gas prices rising which led to limited consumer and corporate spending.
According to a Reuters article,
The expansion in gross domestic product, which measures total output within U.S. borders, was the weakest since a 1.9 percent pace during the first quarter of 2003 and was a surprisingly sharp deceleration from the 3.8 percent rate registered in the fourth quarter of 2004.
Wall Street economists had forecast first-quarter GDP would grow at a relatively more robust 3.6 percent rate.
Since the first-quarter GDP data was compiled, oil prices have continued to rise and fears have grown they will feed into the broader economy, with many analysts expecting growth in the second quarter to be affected further.
Federal Reserve policymakers will meet Tuesday to discuss interest-rate strategy.