The United States economy is going through a slowdown. The overall GDP growth fell to 0.2 percent as compared to 2.2 percent growth in the last quarter of 2014. This is a sign of the stagnant economy during the first quarter. Severe weather conditions especially during winters and west coast port strike have major contributors to the slowdown. The dip in the oil prices along with low investment into the energy sector are some other factors behind this slow GDP growth.
Oil companies are not willing to invest in new project and exploration mission due to low crude oil prices in the international market. The small 0.2 percent growth was fuelled mainly by personal consumption, which amounts to 1.3 percentage points. Weaker business investments pull down GPD by 0.4 percentages. Another major concern for dragging GDP down is exports. The negative export growth has resulted in 1 percentage point reduction in the GDP. The labor strikes and the stronger dollar is having a bigger impact than expected. The labor market is still strong despite the depression situation of the economy in the first quarter.
The unemployment rate is lowest in last seven years. The economy added 126,000 nonfarm jobs in March after monthly addition 200,000 since last 12 months. The unemployment rate is 5.5 percent now from the previous figure of 6.7 percent. The wages are increasing slowly. During last quarter, the Employment Cost Index’s salaries component showed 0.7 percent growth in the last quarter. The year-on-year growth was 1.8 percent last year, which has reached 2.6 percent now.