Incremental Improvement

Despite a generally strengthening economy, the combination of surprisingly cold weather in the Northeast and parts of the Midwest and declining capital expenditures (due primarily to falling oil prices and weak exports due a strengthening dollar) will reduce Q1 GDP growth to below 2.5% from earlier forecasts of 3%. Q4 GDP growth is also likely to slightly disappoint and wind up below 2.3%. 2015 will be incrementally better than 2014.