Obama Economy shrank 2.9% in 1st Quarter
The Obama economy at its finest.
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The U.S. economy turned in its worst quarter in five years during the first three months of 2014, shrinking more sharply than previously estimated.
The nation’s gross domestic product in the first quarter fell at a 2.9% annual rate vs. the 1% contraction previously believed, the Commerce Department said Wednesday. Economists surveyed by Bloomberg expected a 1.8% drop in output from the fourth quarter.
The decline was the sharpest since growth tumbled 5.4% in the first quarter of 2009 during the Great Recession. It was also one of the worst falloffs outside of a recession since 1960.
The last time the economy shrank was in the first quarter of 2011, almost two years after the 2007-2009 recession ended, when it slipped 1.3%.
The more dramatic drop last quarter was partly the result of smaller growth in household consumption than previously estimated. Consumer spending increased just 1%, vs. the 3.1% gain previously estimated as health care spending dipped slightly. The government previously said that medical expenditures contributed about a percentage point to growth as the Affordable Care Act began to cover more Americans. On Wednesday, it said healthcare spending subtracted 0.16% from growth.