The revelation that economic growth virtually stalled in the first quarter could set the Fed up to sound more dovish later Wednesday, but probably not slow its plans to pare back its bond buying program.
First quarter GDP, released Wednesday morning, showed growth of just 0.1 percent, about a full percentage point below expectations. It also contained some disturbing details like a sizable drop in business spending and a slowdown in exports. But ADP's earlier report of 220,000 jobs added in April gave support to the idea that hiring is picking up and that much of the first quarter's sluggishness was weather-related.
"I do see a lot of weather in here. The inventories was a big loss, but that's something that sets the stage for better growth going forward," said Diane Swonk, chief economist at Mesirow Financial. "It was weaker than expected. You see the weather imprint but you see more than the weather imprint."