Weekend Economists Pull Timmy Out of Well (and Throw Him Back In)May 30-June 1, 2014

[Demeter]

24. Economy was hit harder by severe winter than initially feared

http://www.latimes.com/business/la-fi-gdp-economy-growth-20140530-story.html

The economy stumbled badly during the severe winter, much more than first estimated, according to a government report, and stalled a recovery that appeared poised to take off this year.

Economists, however, see the quarterly drop more as a delay in the nation's long revival from the Great Recession. Other recent data indicate economic growth has picked up significantly this spring, putting the recovery back on a slowly improving track.

Total economic output shrank at an annual rate of 1% from January through March, the first quarterly contraction in three years and just the second since the recession ended nearly five years ago, the Commerce Department said Thursday. The department's revised figure for what is known as gross domestic product was far worse than the 0.1% growth initially reported last month. And the revision was steeper than the 0.5% contraction economists had anticipated.The new reading also makes it unlikely that the economy will expand this year at the 3% rate economists previously projected.

"We've got to climb out of that hole" in the first quarter, said Brian Bethune, chief economist at consulting firm Alpha Economic Foresights. "You can think of it as a temporary setback, but it is going to pull down growth projections for this year."

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http://www.trbimg.com/img-5387af82/turbine/la-fi-g-gdp-chart-20140529/400/16x9