Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
The US economy shrank much more than previously estimated in the first quarter, in the sharpest contraction in five years, the Commerce Department said today.
Gross domestic product fell at a 2.9% annual pace in the first three months of the year, much worse than the previous estimate of 1%.
It was the steepest contraction since the 2009 first quarter, when GDP plunged 5.4% during the deep recession spawned by the 2008 financial crisis.
The Commerce Department said figures showed weaker growth in consumer spending, a larger increase in exports and higher imports than previous estimates.
The economy was hit by unusually severe winter weather in much of the country at the beginning of the year, after growth of 2.6% in the 2013 fourth quarter.
But the weak first quarter did not suggest that the US is slipping into recession, technically defined as two consecutive quarters of GDP contraction, as second-quarter data has shown the economy rebounding.
The Federal Reserve has shrugged off the weak first quarter as largely weather-related. In June the Fed cut, for the fifth time in a row, $10bn from its economic stimulus program, bringing it to $35bn a month.
Jim O’Sullivan, chief US economist at High Frequency Economics, called the first-quarter report “an outlier”.
“If anything, labor market indicators and business surveys are suggesting a net pick-up in the trend so far this year. We expect at least partial payback with a strong 4.0% rate of growth in Q2,” he said.
European stock markets fell today, with losses accelerating after the US figures were reported.
To embed this post, copy the code below on your site
I’m sure that they will soon ‘turn the corner’ and be on the road to recovery….. oh wait
Perhaps Obama should ask Enda Kenny. He’ll know what to do.
America is well on the way to recovery. They have had reasonable growth for about 2 years now. Their debt levels are falling and long term it is going down quiet fast.
The Euro zone hasn’t even ended from the 2007 collapse.
Damn it why do I for once agree with seanie. Must be a blue moon tonight
Singapore instructing its banks to hold liquid assets for upcoming “crises”.
America is simply not on it’s way to recovery Seanie. The numbers just don’t add up with regards to their official inflation figures. The books are being cooked like never before
Worrying how quickly the euro follows the dollar..
That’s because the dollar is currently the worlds reserve currency & all other fiat currencies are pegged to it after the gold standard was abolished. The dollar goes & everything else goes with it. The BRIC countries have been buying up huge quantities of gold over the last few years because they can see what’s coming around the corner. A massive economic collapse unlike anything ever seen is on the horizon.
“The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion.
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
Ludwig von Mises
The monetary system in place at the moment is not just based on constant growth in order to function, it is based on exponential growth. If you don’t understand this then google exponential growth and you will see how the current world economy cannot and will not survive a collapse before the end of 2015
A 3% contraction is enormous.
If this continues Hilary won’t meet the landslide she expected..
They will turn the corner but don’t forget the new shoots and all the BS we were fed send in the Troika they will do a job on them. karma!!!!
One word sums up the disaster that is facing the USA..Obama
The country has been deceived by the Devil…
Who would your vote go to Frank?
Feel free to explain your xenophobic comment towards one democratically elected politician in a country with a population of over 300 million…go
Jereme…..There is a serious problem about voting in America…
Frank, would you prefer the Cons be in power rather than the Dems?
that’s the problem Stan, a false dichotomy, they just play ping-pong every 4/8 years and share similar goals.
4 years is about the memory spam of the average voter, world wide.
“span”, obviously.
Freudian, perhaps.
Stan Smith … same crap … just different piles..
What’s your answer Frank?
Who would you vote for?
(Remembering there won’t be a brown skinned one to draw your ire next time),
Jeremy Usborne are you trying to hit me with the race card?
The race card has certainly not let away him with his filthy lies, murder and back tracking.
There is very little choice ahead of us between that other psychopath Hillary Clinton.. But I would not put a pass on it if Obama gets in the 3rd time by appealing the 22 amendment..
How about this Jeremy…I’d vote for Condeleeza Rice in a heartbeat. Go ahead and throw the race card…just understand that you sound like a clueless dolt when you do…
The Tea Billies are going to have a field day with that news
And all the while the 3 major US indices surge ahead. A cynic might almost think it’s all being caused by near hyperinflation and is not actually representative of any gains at all in real terms; thank god I’m not a cynic.
” You have heard inflation reduced to the phrase, “too much money chasing too few goods.” It is an overly narrow definition. Inflation is too much money. What the redundant increment of purchasing power chooses to chase is variable but always mischievous. It varies from cycle to cycle.
In one market interval, the dollars may chase skirts — or toothpaste or automobiles. This is inflation at the checkout counter, the familiar CPI variety. Or the dollars may chase stocks — or bonds or Iowa farmland. On Wall Street, where I work, this is the kind of inflation known as a “bull market,” and most of us cheer it on. The inflation of asset values is the kind of inflation that is prevalent today.”
James Grant
This is worrying , hopefully not a sign of things to come .
Thanks Obama
How long till Hillary is on MSNBC blaming the Republicans?
The bill for those Obamphones has just come in.
Push, push!
Im here in Boston, and i can tell you, its getting worse!
have your say