Q1 GDP Growth Expected To Be Tepid Due to Weak Consumer Spending

“Tepid gains in consumer spending have helped send some economists’ first-quarter GDP growth forecasts below 2 percent, The Wall Street Journal reports.

The economy expanded 2.6 percent in the fourth quarter.

Consumer spending rose 0.3 percent in February, the government announced, but January’s increase was revised down to 0.2 percent from 0.4 percent.

Research firm Macroeconomic Advisers now predicts the economy will grow 1.3 percent in the first quarter, down from its prior forecast of 1.5 percent, according to The Journal. JPMorgan Chase cut its first-quarter projection to 1.5 percent from 2 percent.

Barclays Capital trimmed its prediction to 2 percent from 2.4 percent, and research firm MFR cut its forecast to 1.2 percent from 1.8 percent, The Journal reports.

Consumer spending accounts for about 70 percent of GDP. The nasty winter weather in much of the country may have kept numerous consumers at home during the first three months of the year….”

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