Tipsheet

On the Road Back to Recession: Economy Shrinks by 2.9 Percent

The U.S. economy contracted by 2.9 percent in the first quarter of 2014, prompting the headline, U.S. Economy Shrinks By Most Since Great Recession, over at Fox Business.

The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month.

While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate.

The silver lining?

There are indications that growth has since rebounded strongly.