Incremental Improvement

Despite a generally strengthening economy, the combination of surprisingly cold weather in the Northeast and parts of the Midwest, 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.