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Economy Contracted by 3 Percent in First Quarter

The final assessment by the Commerce Department is in, and the growth rate for the first quarter of 2014 was in fact not a growth rate at all, rather, a contraction of 2.9 percent.

It’s the fastest rate of decline since 2009. Commerce had previously estimated a one percent retreat.

The cold weather explains some of this. But a little chilly air should not throw the U.S. economy for such a dramatic loop.

Things seem to be picking up, but it’s looking like the 2014 rate of growth might not even reach 2 percent.

The big culprit in the latest adjustment is consumer spending, which grew just 1 percent, less than previously thought. So let’s keep talking about income inequality, because destroying the job-making class is really going to put money in people’s pockets.

Meanwhile, President Obama today fired his economic team and called advisors who have departed back in for a tongue lashing.

Sure, right.

14 Responses to Economy Contracted by 3 Percent in First Quarter

  1. The BLS is exaggerating the decline in Q1 so that they can show growth in Q2. Basically, instead of showing -1.7% in Q1 and -1.0% in Q2, they will show -2.9% in Q1 and +0.2% in Q2 just so they can say there is no recession.

  2. Don’t forget many workers took a pay cut as Obamacare kicked in. Daughter took a 200 a month pay cut when her company stopped paying any money for health care. They were giving employees a 200 a month allotment towards company plan. Now they pay more for the same coverage.

    • Most likely Obamacare is the biggest couse of the drop as entire sectors of the economy were downsized from 40 hours a week to 29 hours per week to avoid Obamacare. A good friend of mine manages a large national resturant and they cut every employee except management down to 29 hours.