Economy Shrinks in First Quarter of 2014: GDP Revised to -1 Percent

Katie Pavlich | May 29, 2014 9:10 AM

According to numbers released by the Bureau of Economic Analysis Thursday morning, the U.S. economy shrunk quarter of 2014, the first contraction since 2011.The BEA revised an earlier GDP growth number of just .01 percent down to -1 percent. Another shrink in the second quarter would land the U.S. officially in a recession (even though it already feels like we're there).

Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- decreased at an annual rate of 1.0 percent in the first quarter according to
the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP
increased 2.6 percent.

The GDP estimate released today is based on more complete source data than were available for
the "advance" estimate issued last month. In the advance estimate, real GDP was estimated to have
increased 0.1 percent. With this second estimate for the first quarter, the decline in private inventory
investment was larger than previously estimated (see "Revisions" on page 3).

The decrease in real GDP in the first quarter primarily reflected negative contributions from
private inventory investment, exports, nonresidential fixed investment, state and local government
spending, and residential fixed investment that were partly offset by a positive contribution from
personal consumption expenditures. Imports, which are a subtraction in the calculation of GDP,
increased.