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U.S. Economy Contracts in First-Quarter on Inventories, Trade (Revised to minus one percent)
Reuters ^ | Thursday, May 29, 2014 | Lucia Mutikani

Posted on 05/29/2014 5:45:43 AM PDT by kristinn

The U.S. economy contracted in the first quarter for the first time in three years as it buckled under the weight of a severe winter, but there are signs activity has since rebounded.

The Commerce Department on Thursday revised down its growth estimate to show gross domestic product shrinking at a 1.0 annual rate.

It was the worst performance since the first quarter of 2011 and reflected a far slower pace of inventory accumulation and a bigger than previously estimated trade deficit.

The government had previously estimated GDP growth expanding at a 0.1 percent rate. It is not unusual for the government to make sharp revisions to GDP numbers as it does not have complete data when it makes its initial estimates.

The decline in output, which also reflected a plunge in business spending on nonresidential structures, was sharper than Wall Street's expectations. Economists had expected the revision to show GDP contracting at a 0.5 percent rate.

(Excerpt) Read more at reuters.com ...


TOPICS: Breaking News; Business/Economy; News/Current Events
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1 posted on 05/29/2014 5:45:43 AM PDT by kristinn
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To: kristinn

Here’s an idea:

Bring back American manufacturing.

Just saying.


2 posted on 05/29/2014 5:47:00 AM PDT by Cringing Negativism Network (http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: Cringing Negativism Network

Have you contacted the White House? They can use all the help they can get.


3 posted on 05/29/2014 5:49:45 AM PDT by 1rudeboy
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To: kristinn

Unexpected??

Still blaming a cold winter for a failed economy. Next will be a dry/wet Spring, then a hot summer.


4 posted on 05/29/2014 5:50:18 AM PDT by KosmicKitty (WARNING: Hormonally crazed woman ahead!!)
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To: 1rudeboy

Even dems are not concerned.

Everyone is sleeping.

(I know you were joking, but I’m not)

America needs jobs, and nobody is on our side. Nobody.


5 posted on 05/29/2014 5:52:10 AM PDT by Cringing Negativism Network (http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: kristinn

Just speculating here, but maybe — just maybe — this has something to do with the fact that some of the Obamacare mandates and taxes kicked in earlier this year and late last year. Nah, that can’t be it. Obamacare saved us money and was positive for the economy.


6 posted on 05/29/2014 5:52:16 AM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: kristinn

Good morning.....off topic question..but do you know if any/all of the Republican Leadership conference ( which starts today) is being broadcast or streamed on-line? I’ve been looking..can’t find any info or links...thanks


7 posted on 05/29/2014 5:52:37 AM PDT by ken5050 ("One useless man is a shame, two are a law firm, three or more are a Congress".. John Adams)
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To: kristinn

Heading into yet another “Summer of recovery”.


8 posted on 05/29/2014 5:52:58 AM PDT by Huskrrrr
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To: kristinn

2 down quarters in a row is a recession. Maybe they can get the VA to do GNP calc for the 2nd quarter.


9 posted on 05/29/2014 5:54:14 AM PDT by AU72
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To: KosmicKitty

It was caused by the ( snow, rain, heat, drought, meteorites, Bush’s fault......).

When will they admit the economy is completely in the dumps?
The debt is now 17.5 trillion. You sure never hear about that.


10 posted on 05/29/2014 5:55:05 AM PDT by shelterguy
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To: kristinn

It’s a racist economy anyway....


11 posted on 05/29/2014 5:55:14 AM PDT by blam
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To: Opinionated Blowhard

Since our economy is consumption based, the increase in premiums have definitely cut into discretionary spending.


12 posted on 05/29/2014 5:58:13 AM PDT by griswold3 (I was born heI're in America. I will die here in a third world country. Obama succeeded.)
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To: kristinn

Would that the government could contract in a fashion as the economy.

In times of plenty the useless and lazy can be supported by the producers, when times get bad, producers balk and the useless and lazy are in peril.

We are living in perilous times.


13 posted on 05/29/2014 5:58:33 AM PDT by urbanpovertylawcenter (the law and poverty collide in an urban setting and sparks fly)
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To: blam
Fault of the wascally wepublicans that won't let zero have his way with the congress.

'Sides, they just need a little bit more money, to really get this show going.

14 posted on 05/29/2014 5:59:05 AM PDT by going hot (Happiness is a momma deuce)
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To: griswold3

Oh, but o-care is a good thing. It caused a BRISK pace of spending.

“””Spending was boosted by the Affordable Healthcare Act, which expanded healthcare coverage to many Americans. Consumer spending had increased at a brisk 3.3 percent pace in the fourth quarter.”””


15 posted on 05/29/2014 6:05:34 AM PDT by shelterguy
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To: kristinn
Data ranging from employment to manufacturing suggests growth will accelerate sharply in the second quarter.

Yes, let's put our trust in the "data," because:

It is not unusual for the government to make sharp revisions to GDP numbers as it does not have complete data when it makes its initial estimates.

Al Reuters labors mightily to find a smiley face. Maybe Paul Krugman can give them some pointers.

16 posted on 05/29/2014 6:10:12 AM PDT by Madame Dufarge
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To: AU72

“2 down quarters in a row is a recession.”

Yes, but it will be Bush’s fault.


17 posted on 05/29/2014 6:14:51 AM PDT by VanDeKoik
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To: going hot
US Economy Shrank By 1% In The First Quarter: First Contraction Since 2011

Spot on the chart below just how high the culmination of over $1 trillion in QE3 proceeds "pushed" the US economy.


18 posted on 05/29/2014 6:15:18 AM PDT by blam
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To: AU72

Heard on the radio this morning that some ‘experts’ are expecting the GDP to contract in the current quarter. If, as I expect, they revise the weak 1st Quarter GDP downward — bammo, there’s your ‘official’ recession.

But then most of the economy has remained in the Tank since before the community-agitator mouthed the Oath of Office.


19 posted on 05/29/2014 6:15:38 AM PDT by Tallguy
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To: kristinn
"The U.S. economy contracted in the first quarter for the first time in three years as it buckled under the weight of a severe winter..."

Could it be that the economy buckled under the endless onslaught of the US government against US businesses, the weight of thousands of punitive regulations, the war on US energy sources and companies, etc?

20 posted on 05/29/2014 6:19:14 AM PDT by Truth29
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To: kristinn
Not to worry. ZERO will fix it.
Wait.
Worry. . . . . . .
21 posted on 05/29/2014 6:19:30 AM PDT by DeaconRed (Deodorant and Common sense. The ones who need it most don't use it. . . . .)
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To: blam
Chart, shmart.

Just need a few more tons of green ink, and fresh paper, zero and the feds will have this puppy humming along in no time.

Better lock up the wheel barrows, they are going to become valuable.

22 posted on 05/29/2014 6:25:36 AM PDT by going hot (Happiness is a momma deuce)
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To: kristinn

It’s the regulatory snowstorm from the Executive Branch.

When do we cut off that infected limb?


23 posted on 05/29/2014 6:26:38 AM PDT by 1010RD (First, Do No Harm)
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To: Cringing Negativism Network

Toothpicks? Shoes? What kind of manufacturing? Be specific.


24 posted on 05/29/2014 6:27:09 AM PDT by 1010RD (First, Do No Harm)
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To: Madame Dufarge

It is not unusual for the government to make sharp revisions to GDP numbers

************
Revisions = sleight of hand to dress up the numbers. This article ties in with your comments; it exposes our descent into national financial ledgerdemain.

http://www.zerohedge.com/news/2014-05-29/our-make-it-look-good-economy-has-failed

“The essence of the U.S. economy is make it look good: never mind quality or long-term consequences, just make it look good today, this week, this month, this quarter: make the pink slime look like meat, make the company look profitable, make the low-quality product look good enough to close the sale, make the unemployment rate low enough to justify re-electing the toadies currently in power, make the body count of bad guys look good, and on and on—just makes the numbers look good now, the future will take care of itself.”


25 posted on 05/29/2014 6:27:14 AM PDT by Starboard
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To: 1rudeboy

The White House will get on this now since they read about it in the news. They will investigate to find out what happened. In about 2017 they will know why these numbers went negative. They will ignore their findings.


26 posted on 05/29/2014 6:28:37 AM PDT by taterjay
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To: Truth29

Good post. You nailed it.


27 posted on 05/29/2014 6:29:29 AM PDT by Starboard
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To: kristinn

Don’t worry, be happy...the stock market, pre market on this news, is up today. Perhaps due to a finite number of stocks being chased by an infinite number of dollars??


28 posted on 05/29/2014 6:29:36 AM PDT by Mouton (The insurrection laws perpetuate what we have for a government now.)
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To: AU72
2 down quarters in a row is a recession.

That could be awkward if they go into a second recession "unexpectedly" and just before the election without anyone feeling like we left the first recession. Eventually people might wonder whether big government liberalism, higher taxes, more regulation, less reward for success and a bigger safety net for failure, topped by ObamaCare's mandates for employers and subsidies for those who don't work might be part of the problem instead of the solution.

29 posted on 05/29/2014 6:30:12 AM PDT by Pollster1 ("Shall not be infringed" is unambiguous.)
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To: KosmicKitty
Unexpected?? Actually, this is not unexpected. Many were predicting that the revision would bring negative growth. IMHO, the contraction in Q1 is really the over inventory build-up in Q4 that did not play out in the Christmas season.

Here is the history of Q4 GDP releases..

Advanced report Jan-14: Q4 GDP at 3.2%
Interim Report Feb-14: GDP at 2.4%
Final Report Mar-14: Q4 at 2.6%

30 posted on 05/29/2014 6:31:21 AM PDT by 11th Commandment ("THOSE WHO TIRE LOSE")
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To: taterjay

In the meantime, no questions will be addressed by the White Hut because of the “ongoing investigation”.


31 posted on 05/29/2014 6:32:01 AM PDT by Starboard
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Comment #32 Removed by Moderator

To: kristinn

33 posted on 05/29/2014 6:32:45 AM PDT by Wyatt's Torch
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To: kristinn

I would not be shocked if Obamacare had something to do with it.


34 posted on 05/29/2014 6:33:17 AM PDT by PghBaldy (12/14 - 930am -rampage begins... 12/15 - 1030am - Obama's advance team scouts photo-op locations.)
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To: Tallguy

GDP growth in 2Q14 will be >2%


35 posted on 05/29/2014 6:33:56 AM PDT by Wyatt's Torch
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To: Truth29

HD co-founder Ken Langone said on CNBC this morning that “slow economic growth is the price we pay for this insanity of regulation on businesses.”


36 posted on 05/29/2014 6:35:20 AM PDT by Wyatt's Torch
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To: Wyatt's Torch

America’s debt is 17.5 trillion, and that is (rapidly) growing.

Just saying.


37 posted on 05/29/2014 6:35:54 AM PDT by Cringing Negativism Network (http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: PghBaldy

Obamacare was actually a positive impact in the quarter. Seriously. That’s how it was counted.


38 posted on 05/29/2014 6:36:11 AM PDT by Wyatt's Torch
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To: Cringing Negativism Network

Okay... Now what?


39 posted on 05/29/2014 6:36:45 AM PDT by Wyatt's Torch
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To: 1010RD
Toothpicks? Shoes? What kind of manufacturing? Be specific.

Everything people use everyday. Making things people use everyday is the only way to create real wealth.

40 posted on 05/29/2014 6:37:47 AM PDT by Count of Monte Fisto (The foundation of modern society is the denial of reality.)
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To: Wyatt's Torch

My own personal preference would be, that America would stop spending our money on stuff made in other countries, and we would rather bring back industry to America.

Just saying.


41 posted on 05/29/2014 6:38:17 AM PDT by Cringing Negativism Network (http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: Cringing Negativism Network
America needs jobs, and nobody is on our side. Nobody.

You sure seem right about that. The Republicans are not serious about creating jobs. And the Democrats most certainly aren't concerned with creating jobs.

But it is a HUGE issue to the public at large. Meaning they will turn their back on both parties and elect the first slick-talking charlatan who promises to make jobs his A#1 priority.

Can you say Hitler 2.0?


42 posted on 05/29/2014 6:39:30 AM PDT by Buckeye McFrog
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To: 11th Commandment

If not for Obamacare expenditures the economy would have sunk even further:

http://www.zerohedge.com/news/2014-05-29/excluding-obamacare-us-economy-contracted-2-first-quarter

“As if the official news that the US economy is just one quarter away from an official recession (and with just one month left in the second quarter that inventory restocking better be progressing at an epic pace) but don’t worry - supposedly harsh weather somehow managed to wipe out $100 billion in economic growth from the initial forecast for Q1 GDP - here is some even worse news: if one excludes the artificial stimulus to the US economy generated from the Obamacare Q1 taxpayer-subsidized scramble, which resulted in a record surge in Healthcare services spending of $40 billion in the quarter, Q1 GDP would have contracted not by 1% but by 2%!”


43 posted on 05/29/2014 6:39:56 AM PDT by Starboard
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To: 1rudeboy
Have you contacted the White House? They can use all the help they can get.

Are you kidding....bammy just heard about this!

44 posted on 05/29/2014 6:40:21 AM PDT by ealgeone (obama, borderof)
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To: PghBaldy
Without Obamacare spending GDP would have contracted by 2%. Here is the jump in healthcare spending:


45 posted on 05/29/2014 6:40:29 AM PDT by Wyatt's Torch
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To: Cringing Negativism Network

Yes you’ve been beating that drum incessantly in every economics post on FR.


46 posted on 05/29/2014 6:41:35 AM PDT by Wyatt's Torch
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To: Buckeye McFrog

I would (much) prefer the Tea Party step up, and start to be all of our champions.

Tea Party stand up for American businesses.

I believe there is a whole huge amount of common ground, onto which a significant, real political party can be grounded firmly in America.

But I strongly believe it must involve industry. America needs to build things right here.

Tea Party, stand up for America.


47 posted on 05/29/2014 6:43:24 AM PDT by Cringing Negativism Network (http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: Cringing Negativism Network

Here’s an idea:

How about shutting up unless you have something new to say.

Just saying.


48 posted on 05/29/2014 6:44:01 AM PDT by staytrue
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To: kristinn

Another reason we need “comprehensive illegal alien reform”. /sarc


49 posted on 05/29/2014 6:45:32 AM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: Cringing Negativism Network
My own personal preference would be, that America would stop spending our money on stuff made in other countries, and we would rather bring back industry to America.

Your personal preference to dictate how I, and not "America," spend my money is noted.

50 posted on 05/29/2014 6:46:16 AM PDT by 1rudeboy
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