US economy contracts in first quarter of 2014
Published on May 29, 2014 10:29 PM
NEW YORK (AFP) - The US economy contracted at an annual rate of 1.0 per cent in the first three months of 2014, a significantly weaker performance than initially estimated, official data showed Thursday. It was the first time the world's largest economy shrank since the 2011 first quarter.
The contraction was twice as strong as analysts' consensus estimate. The Commerce Department previously estimated gross domestic product (GDP) grew a tepid 0.1 percent in the first quarter that was marked by unusually severe winter weather.
The weakness was more than accounted for by a marked decline in inventory investment, especially by motor vehicle dealerships, the Commerce Department said. Inventory investment was revised down, particularly in retail trade, manufacturing, mining, utilities and construction. Excluding inventory investment, GDP grew 0.6 per cent in the first quarter.
Imports, which subtract from GDP, were revised higher. Also contributing to the fall in GDP were declines in exports, business investment, state and local government spending and housing investment.
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