Economy Shrinks 0.7% in First Quarter

Washington Post: “The U.S. economy shrank at an annualized pace of 0.7 percent in the first three months of the year, according to government data released Friday morning, a tumble for a recovering nation that until recently seemed poised for takeoff.”

“The contraction, the U.S.’s third in the aftermath of the Great Recession, provides a troubling picture of an economy that many figured would get a lift from cheap oil, rapid hiring, and growing consumer confidence. Instead, consumers have proven cautious and fracking companies have frozen investment — all while a nasty winter caused havoc for transportation and construction and a strong dollar widened the trade deficit.”

Wall Street Journal: “Most economists expect the economy to regain steam as the year unfolds, and early signs point to a slight spring rebound. GDP is expected to grow at a roughly 2% pace in the current quarter under economists’ latest projections.”

“But underlying demand appears to have reverted to sluggishness after a surge in output last summer sparked hopes of the economy finally shifting into a higher gear. Compared to a year earlier, the economy grew 2.7% in the first quarter, though that figure is exaggerated by a sharp contraction that occurred in the first quarter of 2014.”

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