US Economy Slows to a Pace of 0.5% in Q1 2016

According to new figures, the US economic growth slowed to an annual pace of 0.5% in Q1 of 2016.

That was a sharp fall from the 1.4% rate of growth in Q4 of 2015 and the slowest pace in two years.

The slowdown, which was bigger than most economists forecast, has been blamed on a fall in domestic demand and a strong dollar that has put a brake on exports.

With shoppers buying less, businesses have been reluctant to order new stock.

Consumer spending, which accounts for more than two-thirds of the US economy, increased at a rate of 1.9%, down from 2.4% in the previous quarter.

Business investment fell by 5.9% – the biggest quarterly decline since the depths of the financial crisis in 2009.

Oil and gas exploration fell by a record 86% as energy companies cut back on spending following the dramatic slide in oil prices.

Although cheaper oil has given consumers more spare cash, it has also cut the profits of businesses dependent on the oil industry.

Despite the economy slowing, unemployment fell below 5% in January, and April 29 jobs report is expected to show steady growth in employment numbers.

On April 28, the Federal Reserve said that “labor market conditions have improved further even as growth in economic activity appears to have slowed”.