Consumers and businesses kept spending at a decent pace, but the negative number the government reported Wednesday is a slight downgrade from its previous estimate for January-March. Economists, though, say that doesn't mean there's a recession.
WASHINGTON — The U.S. economy shrank at a 1.6% annual pace in the first three months of the year, the government reported Wednesday in a slight downgrade from its previous estimate for January-March quarter.
Last month, the Commerce Department had pegged first-quarter GDP growth at 1.5%. But on its third and final estimate Wednesday the department said consumer spending — which accounts for about two-thirds of economic output — was substantially weaker than it had calculated earlier, growing at a 1.8% annual pace instead of the 3.1% it estimated in May.
Still, the negative GDP number probably doesn’t signal the start of a recession, and economists expect growth to resume later this year.The first-quarter dip doesn’t say much about the underlying health of the economy: A bigger trade deficit — reflecting Americans’ appetite for foreign goods and services — slashed 3.2 percentage points off the change in January-March GDP.Still, the U.S.
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