US economy nearly stalls as weather and costs bite

US economic growth braked more sharply than expected in the first quarter, as harsh weather dampened consumer spending and energy companies struggling with low prices slashed spending, but there are signs activity is picking up.

GDP expanded at only 0.2% annually, the Commerce Department said yesterday, a big step down from the fourth quarter’s 2.2% pace and marked the weakest reading in a year.

A strong dollar and a now-resolved labour dispute at normally busy West Coast ports also slammed growth, the government said. The weak growth, though probably temporary, reduces the chances of a June interest rate hike from the Federal Reserve.