U.S. economic growth likely stalled in the first quarter as domestic demand cooled and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.
Gross domestic product probably rose at a 0.7 percent annual rate after a 1.4 percent pace in the fourth quarter, according to a Reuters survey, also as businesses stepped up efforts to reduce unwanted merchandise clogging up their warehouses.
Growth was also likely dented by cheap oil, which has hurt the profits of oil field companies like Schlumberger and Halliburton and contributed to weak business spending. The Commerce Department will publish its advance first-quarter GDP growth estimate on Thursday at 8:30 a.m. ET.
"I don't think it means the economy is in trouble," said Paul Ashworth chief U.S. economist at Capital Economics in Toronto. "Employment growth was incredibly strong in the quarter and forward-looking surveys have rebounded over the last months, suggesting the second quarter will be much stronger," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.