The latest data shows the U.S. economy contracted significantly more than previously estimated in the first quarter of this year.
On Wednesday, the Bureau of Economic Analysis released its third and final estimate of real gross domestic product for the first three months of 2014. The release showed output in the U.S. declining at an annual rate of 2.9%. This is relative to fourth quarter 2013, when real GDP grew 2.6%.
The final number is also down from BEA’s negative 1% second estimate released last month, and even more sharply from its first estimate that showed GDP growing 0.1%. While this makes Q1 was the economy’s worst quarter in since the recession, economists were anticipating the further downward revision.
“The bad weather in much of the U.S. in early 2014 was a significant drag on the economy, disrupting production, construction, and shipments, and deterring home and auto sales,” wrote PNC Senior Economist Gus Faucher in a note out prior to the release. “But data show growth rebounding in the second quarter, with improvements in home and auto sales and residential construction.”
Also see CNBC: Bad to worse: US economy shrank more than expected in Q1
Naturally, this will be spun as “no problem” or “old news” or the like.
They will encourage you to light up a spleef and chill out: “Don’t worry, be happy.”
News flash: economies are supposed to grow, not contract.