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US economy shrank at 1 percent rate in Q1

| May 29, 2014 | 0 Comments
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WASHINGTON (AP) – The U.S. economy was battered even more than first suspected by the harsh winter, actually shrinking from January through March. But economists are confident the contraction was temporary.

The Commerce Department says that the economy contracted at an annual rate of 1 percent in the first quarter, worse than the government’s initial estimate a month ago that the economy grew by a barely discernible 0.1 percent in the first quarter. It was the economy’s first quarterly decline since a 1.3 percent drop in the first three months of 2011.

This year’s dip reflected slower stockpiling by businesses, a cutback in business investment and a wider trade deficit. Economists are looking for a strong rebound in the April-June quarter as the country shakes off the effects of a severe winter.

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