Skip to comments.U.S. Economy Contracts in First-Quarter on Inventories, Trade (Revised to minus one percent)
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 ...
Here’s an idea:
Bring back American manufacturing.
Have you contacted the White House? They can use all the help they can get.
Still blaming a cold winter for a failed economy. Next will be a dry/wet Spring, then a hot summer.
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.
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.
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
Heading into yet another “Summer of recovery”.
2 down quarters in a row is a recession. Maybe they can get the VA to do GNP calc for the 2nd quarter.
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.
It’s a racist economy anyway....
Since our economy is consumption based, the increase in premiums have definitely cut into discretionary spending.
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.
'Sides, they just need a little bit more money, to really get this show going.
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.”””
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.
“2 down quarters in a row is a recession.”
Yes, but it will be Bush’s fault.
Spot on the chart below just how high the culmination of over $1 trillion in QE3 proceeds "pushed" the US economy.
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.
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?
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.
It’s the regulatory snowstorm from the Executive Branch.
When do we cut off that infected limb?
Toothpicks? Shoes? What kind of manufacturing? Be specific.
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.
“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.”
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.
Good post. You nailed it.
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??
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.
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%
In the meantime, no questions will be addressed by the White Hut because of the “ongoing investigation”.
I would not be shocked if Obamacare had something to do with it.
GDP growth in 2Q14 will be >2%
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.”
America’s debt is 17.5 trillion, and that is (rapidly) growing.
Obamacare was actually a positive impact in the quarter. Seriously. That’s how it was counted.
Okay... Now what?
Everything people use everyday. Making things people use everyday is the only way to create real wealth.
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.
If not for Obamacare expenditures the economy would have sunk even further:
“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%!”
Are you kidding....bammy just heard about this!
Yes you’ve been beating that drum incessantly in every economics post on FR.
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.
Heres an idea:
How about shutting up unless you have something new to say.
Another reason we need “comprehensive illegal alien reform”. /sarc
Your personal preference to dictate how I, and not "America," spend my money is noted.