US economic growth slowed unexpectedly in March, adding further evidence the economy lost momentum in the first quarter amid severe winter weather.
The Chicago Fed National Activity Index, (CFNAI) courtesy of the Federal Reserve Bank of Chicago, fell to -0.42 in March from a downwardly revised drop of -0.18 in February. A median estimate of economists called for an increase to 0.15.
The index’s three-month moving average decreased to -0.27 in March from -0.12 in February.
A reading above zero indicates growth above the historic average, whereas a reading below that level indicates below-trend growth. The monthly indicator is used to measure overall economic activity in the United States, as well as related inflationary pressure.
The Chicago Fed index had shown a slowdown in economic activity at the start of the year, dragged down by weak personal consumption and housing. The figures suggest that both housing and manufacturing were pulling down economic growth in the first quarter, as inclement weather weighed on the market.
On Wednesday the National Association of Realtors will report on March existing home sales. The Commerce Department will report on new home sales on Thursday, while Markit Group will release preliminary April manufacturing PMI.
US GDP growth is forecast to slow in the first quarter after slumping at an annual rate of 2.2 percent in the final three months of 2014. Economists expect GDP growth in the vicinity of 1.5 percent to 2 percent annually in Q1. The Commerce Department will release preliminary Q1 GDP data on April 29.