NEW YORK (CNN) – America’s economy shrank even more than expected in the first three months of the year, but don’t freak out.
No question this is an ugly number: The economy contracted at an annual rate of 2.9 percent in January through March. That’s the weakest quarter since the great recession.
Consumer and business spending declined, so did exports; however, economists aren’t really worried.
Here are three reasons why:
- Blame it on the weather. The winter was so brutal that it really hurt the economy. It kept people from shopping malls, from car lots, from going to open houses, but the slowdown was likely temporary.
- This number will be revised again. The government agency that crunches these stats is due to make historical revisions next month. So it may end up not being as bad as it looks.
- More recent indicators are already looking better. In the last five months, the economy has added 1.1 million jobs. You don’t get that many jobs if the economy isn’t growing at a decent rate.
So yes, first quarter GDP was terrible, but there’s no need to freak out.