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.
“More and more folks are coming around to the view that the long-term growth rate of the American economy is 2 percent, at best. We can’t sustain 3 or 4 percent growth for very long, so it’s two steps forward, one step back,” he was quoted by The New York Times as saying.
Consumers, who account for more than two-thirds of economic output, have been less willing to spend, despite lower gasoline prices.
Personal consumption grew by 1.8 percent last quarter, which is traditionally the best time for consumer spending. It grew 4.4 percent in late 2014.
Americans' satisfaction with the direction of their country continues to fall as they remain worried about government dysfunction and the country’s economic problems.
Just 26 percent of Americans said they were satisfied with the way things are going in the nation, according to the latest data from Gallup's May 6-10 poll.
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