The U.S. economy had a disappointing start to 2015, data released Wednesday showed. Now, a solid second quarter is looking less and less likely as well, clouding the outlook for Federal Reserve policy makers hoping to raise interest rates later this year.
The U.S. Bureau of Economic Analysis reported that gross domestic product expanded at just a 0.2 percent seasonally-adjusted annualized rate in the first quarter. It was below the 1 percent median forecast of economists surveyed by Bloomberg.
After the release, Macroeconomic Advisers cut its GDP growth tracking estimate for the second quarter to 2 percent from 2.2 percent. Its initial forecast, published April 7, was 2.8 percent. In an email to clients, the forecasting firm cited “inventory investment, which was well above expectations, and which points to a larger decline in the second quarter.”