Thursday, June 26, 2014

United States: US Economy Shrank 2.9% in the First Quarter of 2014

According to The Latin American Tribune, the US economy contracted 2.9% in the first quarter of 2014, rendering it the worst performance for the gdp since 2009, the US Commerce Department said Wednesday (June 25).

The preliminary reading on the first quarter indicated that economic activity had contracted 1%.
 
Data on consumer spending, which accounts for more than two-thirds of gdp, was also revised downward from 3% to 1%.

Lower spending on health care and other services was blamed for the drop.

COMMENT: The government had predicted that the overhaul health care system would boost spending in the January-March period.

Gdp grew at an annualized rate of 1.1% in the first quarter of 2013 and a 2.5% rate in the second quarter, accelerating to a 4.1% annualized growth rate in the third quarter and then easing to a 2.6% growth rate in the last three months of the year.