WASHINGTON: The world’s largest economy hit a bigger ditch in the first quarter than initially estimated, held back by harsh winter weather, a strong dollar and delays at ports.
Gross domestic product in the US shrank at a 0.7 per cent annualised rate, revised from a previously reported 0.2 per cent gain, according to Commerce Department figures issued Friday in Washington.
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The median forecast of 84 economists surveyed by Bloomberg called for a 0.9 per cent drop. By contrast, the report also showed incomes climbed, fuelling the debate on whether GDP is being underestimated.
A swelling trade gap subtracted the most from growth in 30 years as the appreciating dollar caused exports to slump while imports rose following the resolution of labour disputes at West Coast ports. Federal Reserve officials are among those who believe the setback in growth will be temporary, helping explain why they are considering raising interest rates this year.
