The U.S. economy contracted slightly in the first quarter as it struggled to combat the effects of bad weather, a strong dollar, spending cuts in the energy sector and disruptions at West Coast ports.
The economy contracted at a 0.2 percent annual rate in the January-March quarter. That was revised up from the 0.7 percent drop that was originally reported.
Most economists believe the contraction was a short-term fluctuation and not an indication the health of the economy.
There was a stronger pace of consumer spending than previously estimated which accounted for the upward revision. Consumer spending accounts for more than two thirds of U.S. economic activity.
With personal saving increasing at a $720.2 billion pace, consumer spending could accelerate in the second quarter. The country’s trade deficit subtracted almost 2 percent for the GDP.
When measured from the income side, the economy expanded at a 1.9 percent rate in the first quarter instead of the previously reported 1.4 percent pace. A measure of domestic demand growth was revised up four-tenths of a percentage point to a 1.2 percent rate.
The projections were in line with economist predictions.
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