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US economy contracted 2.9% in first quarter

Published on Jun 25, 2014 8:42 PM
 
Traders work on the floor of the New York Stock Exchange (NYSE) on June 18, 2014, in New York City. The US economy contracted at a much steeper pace than previously estimated in the first quarter, but there are indications that growth has since rebounded strongly. -- PHOTO: AFP

WASHINGTON (REUTERS) - The US economy contracted at a much steeper pace than previously estimated in the first quarter, but there are indications that growth has since rebounded strongly.

The Commerce Department said on Wednesday gross domestic product fell at a 2.9 per cent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month.

While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate.

The difference between the second and third estimates was the largest on records going back to 1976, the Commerce Department said. Economists had expected growth to be revised to show it contracting at a 1.7 percent rate.

 
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