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The U.S. economy all but stalled in the first quarter, as the brutal winter crippled growth, government data showed Wednesday.
The Commerce Department said economic growth slowed to a 0.1 percent annual pace, the slowest since the fourth quarter of 2012. Economists had been expecting a growth rate of about 1.2 percent, down from the fourth quarter's 2.6 percent pace.
The first-quarter slowdown, however, is likely to be temporary and recent data have suggested strength at the tail end of the quarter.
"All in all, today's GDP was clearly disappointing. However, some of the decline is clearly explained by adverse weather over the winter and will be reversed in the coming quarter," Annalisa Piazza, head of fixed income strategic research at Newedge Strategy, told Reuters.
Economists estimate severe weather could have chopped off as much as 1.4 percentage points from GDP growth. The government, however, gave no details on the impact of the weather.
After aggressively restocking in the second half of 2013, businesses accumulated $87.4 billion worth of inventory in the first quarter, the smallest amount since the second quarter of 2013.
That was a moderation from the $111.7 billion amassed in the fourth quarter that has resulted in manufacturers receiving fewer orders. Inventories subtracted 0.57 percentage point from GDP growth in the first quarter.
Trade also undercut growth, taking off 0.83 percentage point, partly because of the weather, which left goods piling up at ports. Exports fell at a 7.6 percent rate in the first quarter after growing at a 9.5 percent pace in the final three months of 2013.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3.0 percent rate, reflecting a spurt in spending on services linked to the Affordable Healthcare Act.