[“U.S. economy collapses in first quarter, but growing again” – Reuters 6.25.14]
Reuters reports on a drastic downturn in the U.S. economy in the first quarter of 2014.
The news also represents a downward correction of previously-reported data from the Commerce Department.
The U.S. economy contracted at a much steeper pace in the first quarter than previously estimated, turning in one of its worst-ever non-recession performances, but growth already appears to have rebounded strongly.
The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the sharpest decline in five years, instead of the 1.0 percent pace it had reported last month.
Some observers have tried to blame the long, severe winter, and changes in government benefits.
The second quarter reportedly is believed to have demonstrated growth, accompanied by other positive indicators such as certain amounts of job creation.
The economy was held back by an unusually cold winter, the expiration of long-term unemployment benefits and cuts to food stamps, which curbed consumer spending. It was also weighed down by a slowdown in the pace of restocking by businesses.
All these temporary factors have since faded, lifting growth early in the second quarter.