Atlanta Fed drops 1Q growth forecast to nothing

April 2, 2015
ATLANTA (4/3/15)--U.S. growth in the first quarter will post a big goose egg, according to the latest forecast from the Federal Reserve Bank of Atlanta, which recently revised its expectations (Business Insider April 2).

As recently as two months ago, the Atlanta Fed had predicted the economy would grow by 1.9% in the first quarter, but tepid incoming economic data has wiped clean that forecast for now.

In 2014, first-quarter growth dropped by 2.9%, according to Forbes.

"Part of the blame can be put on adverse weather," said analysts from Oxford Economics (Business Insider). "Indeed, some of the most weather sensitive sectors, including motor vehicles and building material and garden equipment, were negatively impacted by the bitter temperatures and severe snowstorms experienced in the winter months."

The analysts added, however, that while poor weather likely played a large factor, they also believe modest wage growth and an uptick in saving by consumers who pocketed the money they saved on gas had an effect.

Other reports attribute the step back to the strength of the U.S. dollar, which is making it more expensive to do business with companies in the United States.

First-quarter data for this year will be released April 29 by the Bureau of Economic Analysis.