US economic growth slowed to an annual pace of 0.5% during the first three months of the year.
That was a sharp fall from the 1.4% rate of growth in the last quarter of 2015 and the slowest pace in two years.
The slowdown, which was bigger than most economists forecast, has been blamed on a fall in domestic demand and a strong dollar that has put a brake on exports.
With shoppers buying less, businesses have been reluctant to order new stock.
Consumer spending, which accounts for more than two-thirds of the US economy, increased at a rate of 1.9%, down from 2.4% in the previous quarter.
Business investment fell by 5.9% – the biggest quarterly decline since the depths of the financial crisis in 2009.
Oil and gas exploration fell by a record 86% as energy companies cut back on spending following the dramatic slide in oil prices.
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