US economy shrank by 0.7% in first quarter: Data

The US economy shrank at an annualized rate of 0.7 percent from January through March, according to official figures.

The Commerce Department had previously estimated that gross domestic product (GDP) grew 0.2 percent during that timeframe.

Friday’s report also marked the first decline in economic output in the United States since the first quarter of 2014, when the economy contracted by 2.1 percent.

Economists believe a large trade deficit, slower consumer spending as well as harsh winter weather account for the downward revision.

“This isn’t the off-to-the-races kind of expansion we envisioned six months ago,” said Scott Anderson, chief economist at Bank of the West in San Francisco.

 

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