The US economy grew at the weakest pace in two years at the start of 2016 as consumer spending slowed, business investment plunged and exports declined further, the US Department of Commerce announced on Thursday.

The US gross domestic product grew by just 0.5% in the first quarter, down from 1.4% in the fourth quarter of 2015.

The news of disappointing GDP growth from January to March came as Barack Obama defended his economic legacy. “I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform,” Obama told the New York Times magazine. “By that measure, we probably managed this better than any large economy on Earth in modern history,” he said.

Based on interviews with the president and other members of his administration, the magazine explored why even as Obama lauds the US economic successes many Americans feel left behind.

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Each month, even as the unemployment rate has dropped below 5%, officials at the US Department of Labor note that wages remain the “unfinished business” of the US recovery. US wages have remained largely stagnant as, on average, Americans are still earning the same wages they were in 1997 and 46.7 million of them are still living in poverty.

Some of the blame, according to Obama, falls on the shoulders of the Republican-held Congress. Over the years, Obama has called on US lawmakers to increase the national minimum wage and pass an infrastructure bill, which was finally signed into law earlier this year.

“I can probably tick off three or four common-sense things we could have done where we’d be growing a percentage or two faster each year,” Obama said. “We could have brought down the unemployment rate lower, faster. We could have been lifting wages even faster than we did. And those things keep me up at night sometimes.”

The new figures show that economic recovery slowed down in the first three months of this year. Thursday’s GDP figures were the worst since early 2014, when the GDP contracted by 0.9%.

“In the detail, all main parts of the economy slowed with the exception of the housing market, the latter probably reflecting low mortgage rates,” said Chris Williamson, chief economist at Markit. “Business spending fell at the fastest rate since the second quarter of 2009, dragged 5.9% lower by cost cutting in the energy sector in particular. Consumer spending growth also slid from 2.4% to 1.9% and exports fell at a 2.6% pace.”

Economists expected the GDP to grow by 0.7% in the first quarter. Since typically GDP growth is weaker in the beginning of the year but rebounds by spring, economist predict second quarter growth to be around 2%.

The slowdown in economic conditions might delay the Federal Reserve’s decision to raise interest rates in the near future. On Wednesday, the Fed announced for a third time this year that it was not raising interest rates. In December, it raised rates from near zero for the first time in almost a decade. The Fed was initially expected to raise interest rates four times in 2016, a forecast that has since been adjusted to just two rate hikes this year.

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In the statement released on Wednesday, Fed officials noted that labor market conditions have improved “even as growth in economic activity appears to have slowed”.

“Growth in household spending has moderated, although households’ real income has risen at a solid rate and consumer sentiment remains high,” they wrote.

Thursday’s figures are preliminary and will be revised twice more. The first revision will be released at the end of May, more than two weeks before the Fed next meets to discuss interest rates.

“Worryingly, the surveys indicate that the malaise affecting the US economy has extended into the second quarter, albeit with the pace of expansion picking up slightly to 0.8%,” said Williamson.

“With the Fed facing only a small window of opportunity to hike interest rates before the election, such disappointing data for the second quarter raises the likelihood of any rate hike being pushed out until December, meaning the data for May could be all-important for the Fed.”