US economy stalled in first quarter: Economists

The U.S. economy may have stalled in the first quarter.

CNBC Rapid Update, which averages tracking forecasts from economists, fell 0.4 percent to 1.4 percent after the government reported weaker-than-expected consumer spending in February.

One survey participant, Stephen Stanley of Amherst Pierpont Securities in Stamford, Connecticut, is predicting zero growth in the first quarter. That would be the lowest growth rate since the first quarter last year came in negative mostly as a result of harsh winter weather.

"That is not a typo. F-L-A-T," Stanley said in his report Monday morning. "This is turning into a recurrence of last year's nightmare first quarter, when weather drove the GDP figure deep into negative territory.

Shoppers are at the Citadel Outlets in Los Angeles.
Jonathan Alcorn | Reuters
Shoppers are at the Citadel Outlets in Los Angeles.

Stanley said he is "very confident" that weather is playing a role, and he predicts "a vigorous rebound in consumer demand in March and/or April (judging by the snow that I drove through to get to work this morning)." Other economists appear to agree; the average second quarter forecast is a robust 3.5 percent, according to CNBC Rapid Update.

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The government reported Monday morning that consumer spending rose just 0.1 percent, less than economists had expected. Taking away inflation, real spending actually fell a point. But incomes, including wages and salaries, rose relatively strongly. The combination of growing incomes but declining spending caused the savings rate to surge to 5.8 percent, the highest since December 2012.

Mark Zandi of Moody's Analytics, which compiles the survey for CNBC, slashed his own forecast by half a point and is now predicting just 0.6 percent growth in the first quarter.

"The economy hit an air pocket in the first quarter, with growth largely stalling out," Zandi told CNBC. "Consumers have been surprisingly cautious spenders in recent months. But this shouldn't last long. Consumers will soon get their groove back, supported by the strengthening job market, near record stock prices, sturdy house price gains and gasoline savings."

Read MoreUS consumer spending rises modestly; savings at 2-year high

Jim O'Sullivan of High Frequency Economics kept his first quarter tracking number unchanged at 1.8 percent, among the higher forecasts on the Street right now.

A tracking forecast begins with a base case for growth for a given quarter and adjusts with incoming data. CNBC Rapid Update provides the median change and level for the current and prior quarters from up to 11 different economists to show how a given data point changes the consensus view of growth.