Harsh US winter has chilling effect on economy
Friday 30 May 2014
Savage winter weather pushed the US economy into reverse in the first quarter of 2014 for the first time in three years, official figures showed yesterday.
The “polar vortex” which swept the country and pushed temperatures in New York to a record low of minus 16C in January meant that the world’s biggest economy shrank at an annualised pace of 1 per cent between January and March, according to the latest official growth estimates.
It was the first setback for the US recovery since the beginning of 2011, when the economy shrank 1.3 per cent.
The decline also reflected lower business investment and a wider trade deficit, although economists expect the US to bounce back in the current quarter.
May has seen the biggest hiring spree in two years, with 288,000 jobs added, driving the unemployment rate to a five-year low of 6.3 per cent.
Chris Williamson, the chief economist at the business information provider Markit, said: “Current indicators suggest this was merely a temporary setback in an otherwise ongoing robust recovery.”
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