Just when investors were starting to feel better about the economy, the GDP report came out — and the news was really bad. According to a Dow Jones Newswire poll of economists, it was expected that the economy would contract at a rate of 4.6 percent in Q1. Naturally the 6.1 percent came as a huge surprise, and one that shows us that we might be getting ahead of ourselves thinking this recession is wrapping up. For more on this, read the following post from Tim Iacono.
The Commerce Department reported that the U.S. economy contracted at a pace much faster than expected during the first quarter as business investment posted a record decline and exports of U.S. goods experienced their biggest drop in more than 40 years.
Following the fourth quarter's 6.3 percent pace of contraction, the U.S. economy shrank at a seasonally adjusted annualized rate of 6.1 percent last quarter, surpassing the consensus estimate of minus 5.0 percent. This was the worst back-to-back performance in 60 years.
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