The US economic shrunk by 0.7% in the first quarter of 2015.
Economists blamed the harsh winter.
The AP reported:
The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially thought.
The overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period, the Commerce Department reported Friday.
The revised figure, weaker than the government’s initial estimate of a meager 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending. It marked the first decline since a 2.1 percent contraction in the first three months of 2014, a slump that was also blamed on winter weather.
Analysts generally foresee the economy growing at an annual rate of 2 percent to 2.5 percent in the current April-June quarter, with further strengthening later in the year. But they are also wary of ongoing risks, such as the strong dollar’s impact on the trade deficit and cutbacks in oil drilling that could depress spending in the energy industry.
“While the evidence of a second-quarter rebound hasn’t been overwhelming, we still think that the outlook for the economy is very encouraging,” Paul Ashworth, chief U.S. economist at Capital Economics, said.
Much of the new-found weakness stemmed from a wider trade deficit, reflecting weaker exports and a bigger jump in imports than first estimated.