By Isaac Cohen*
As the April meeting of the Federal Reserve was concluding in Washington, last week, the Commerce Department released the first estimate of US growth for this year’s first quarter. The figure was a disappointing 0.2 percent, due to factors characterized by the central bank as transitory. Among them the severe winter was singled out as mostly responsible for the fall, but there were others, such as lower oil prices, a strike in West Coast ports and the strong dollar.
Every winter, since the official end of the last recession, the US economy slowed down to an average annual growth rate of 0.6 percent, to rebound in the following quarters. By considering the factors contributing to the winter slowdown as transitory, the central bank is saying that there is stronger growth ahead. Nonetheless, the weak performance in the first quarter pulls down the yearly growth figure.
This year’s first quarter figure was meager, but still positive. By contrast, in 2014 the yearly growth average was pushed down to 2.4 percent by a contraction of 2.1 percent during the first quarter. The same can be expected to happen this year, after the barely positive winter performance. The Federal Reserve for this year projects economic growth of between 2.6 to 3 percent.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.