U.S. economy contracted 0.7% in first quarter

“The United States economy got off to an even weaker start this year than first thought, the government reported Friday, as economic activity contracted because of a more dismal trade performance and continued caution by businesses and consumers alike,” Nelson D. Schwartz reports for The New York Times. “The 0.7 percent annual rate of decline in economic output in the first quarter of 2015 was a reversal of the initial 0.2 percent advance for the period reported last month by the Commerce Department.”

“The pullback was the third time that economic activity had posted a quarterly contraction since the current recovery began in mid-2009, with declines in output in the first quarters of 2011 and 2014,” Schwartz reports. “Even acknowledging flaws in the way the government takes account of expected seasonal variations, that on-again, off-again pattern helps explain why annual growth rates in recent years have been well below the pace of gains recorded in the 1990s and mid-2000s.”

“Much of the revision reported Friday was spurred by fresh data showing that exports fell more than first thought and imports rose higher. Economists at Goldman Sachs noted that the change in the trade balance shaved 1.9 percentage points off overall growth last quarter, the largest quarterly drag from net exports in three decades,” Schwartz reports. “Most experts had expected the data released on Friday to show a contraction in the first quarter, and virtually no mainstream economists are predicting that the economy is about to fall into a recession. Still, the weak start for the year is a crucial reason that the Federal Reserve has pulled back from any plans to raise short-term interest rates in June, with officials now suggesting that the first rate increase from near zero is not likely to come until September or even later this year.”

Read more in the full article here.

MacDailyNews Take: Blech. The most anemic “recovery” ever continues unabated.

SEE ALSO:

Apple increases prices in Europe, Canada due to strengthening U.S. dollar – May 19, 2015
Surging dollar may take a bite out of Apple’s earnings – January 22, 2015
Apple changes App Store pricing worldwide due to currency swings – January 10, 2015
Apple hikes iPhone prices in Russia 35% after ruble plunges – December 22, 2014

42 Comments

  1. Q1 2015 (October-December 2014) was the worst winter of the last 20 years, so it’s not surprising that Q1 numbers would be ever so slightly lower.

    As much as Republicans cream their jeans every time there’s bad economic news, you can certainly expect spring and summer numbers to be much better.

    And as always since 2010, corporate profits are still at record highs. The “one percenters” are raking it in. The economy for the middle class is stagnating simply because the 1% are hoarding all that money at the top in their Scrooge McDuck money bins and not paying their employees anything more than they did in 2009. (And BTW those guys at the top making record profits in the Obama era and swimming around in their massive cash hoards that will only ever “trickle down” to their direct descendants? Republicans.)

    1. The 1% as yo opined are financially smarter then the rest. SO what does the 1% do that other don’t? Well most of them worked hard, saved and invested. What do the jooops of the world do? Well they spend all their paychecks and hope the government will take care of them. They have cars they can’t afford, smart phones they can’t afford and save nothing. Working more then one job or a job they don’t like is a concept they just can’t understand. Don’t worry the democrats will take care of you, right up until they run out of money and destroy the country with debt.

      1. Except it’s an undeniable fact that more federal dollars go to red states than to blue states and blue states contribute more dollars to the fed than red ones do. Not only that, but even within states the more strongly republican counties and areas get more fed dollars per capita than democrat areas.
        AND, when netted out, blue states pay more dollars to the fed than they get, and red states get more fed dollars than they pay.
        It’s sad that republicans love the “truth” they’re fed, but hate actual facts.

        1. That old canard “Red states get more money from the Feds than they contribute” is true when you count money for illegal immigrants (= warm weather states = red states) and defense spending (a lot of military bases have been placed in warm weather states due to the need for rapid response year round). Subtract those (since the average taxpayer doesn’t benefit much from them) and the numbers are pretty even state to state.

          1. While it’s certainly true that military spending is higher in the red states, it’s not valid to subtract that money. It flows directly into the local economy and thus should be counted as stimulus money just as much as welfare payments, etc.
            In 2013 the average resident of a blue state consumed $1,351 more in federal spending than they paid in while the average resident of a red state consumed $3,466 more than they paid in federal taxes – over two and a half times as much.
            Eight of the ten biggest net contributor states are Democratic and eight of the ten biggest net withdrawers are Republican.
            http://politicsthatwork.com/graphs/net-contribution-to-deficit-by-state
            The idea that republican states get more illegal immigrants is a complete fallacy. The local political climate far outweighs the concept that they are “warm” states. 25% of illegals are in California. http://immigration.procon.org/view.resource.php?resourceID=000845

      2. Pathetic, small-minded, vitriolic stupidity. Yes, there are moochers. But they are a small minority. You insult the vast majority of Americans – who do work hard, manage their money as best they know how, and yet barely manage to get by.

        1. Many many people in the United States are parasites, and they breed more and more parasites by the day. To call them dead weight would be too charitable. Dead weight at least just sits there being useless. The parasites actually go out of their way to actively damage society. The only time they get off their azz is to use their EBT card, burn down Baltimore, play the knockout game on whitey, go to illegal cock fights and eat tamales, go help Uncle Juan across the Rio Grande, or go to the voting booth to vote for more violations of the civil rights of whitey, while also confiscating whitey’s hard-earned money.

      3. I’m curious, dave — since you believe that wealth comes from hard work, saving and investing, I have no doubt that is how you conduct your life.

        So how has that worked out for you?
        What big company do you own?
        How much have you got in the bank?

        1. dave, when you get back to me on the questions above, please also answer these questions:

          – What % of average Americans are not parasites?
          – What % ARE parasites?
          – How much money are all the parasites given each year?
          – How much did the waste of time and lives called the Iraq war cost?

    2. Not only that, but the dollar was relatively strong for that period – which would explain why exports were low (too expensive abroad) and imports were high (cheap here).
      MDN’s take is BS. The stock market is 3x what it was at its lowest, the dollar is stronger, unemployment is under 6% compared with over 10% and millions fewer are employed by governments. The job growth is completely in the private sector.
      And as Jooop alludes to, the jobs growth would be faster if we stopped giving the 1% huge tax breaks based on the fallacy that they’re the economic engine. They stash that money in offshore accounts (ask Mitt). Return to the Reagan rates for the wealthy and use tax breaks to stimulate the middle class. The velocity of money would shoot up.
      But overall a slow steady recovery is far preferable to the fast swings between peaks and valleys that you inevitably get with bubble type recoveries. No economist disagrees with that.

    3. Obama Has Lowest Average 1stQ GDP Growth of Any President on Record

      Obama has presided over the lowest average first-quarter GDP growth of any president who has served since 1947, which is the earliest year for which the Bureau of Economic Analysis has calculated quarterly GDP growth.

      In all first quarters since 1947, the real annual rate of growth of GDP has averaged 4.0 percent.

      In the seven first quarters during Obama’s presidency, it has declined by an average of -0.43 percent. And if you leave out the first quarter of 2009 and look only at the first quarters of the six years since the recession ended, it has averaged only 0.4 percent.

      In the six years of Harry Truman’s presidency for which the BEA has calculated quarterly GDP, the annual rate of growth in GDP in the first quarter averaged 4.5 percent.

      During President Eisenhower’s eight years, it averaged 3.2 percent. During Kennedy’s three years, it averaged 4.9 percent. During Johnson’s five years, it averaged 8.3 percent. During Nixon’s six years, it averaged 5.3 percent. During Ford’s two years, it averaged 2.3 percent. During Carter’s four years, it average 2.4 percent. During Reagan’s eight years, it average 2.1 percent. During George H.W. Bush’s four years, it average 2.9 percent. During Clinton’s eight years, it averaged 2.6 percent. And during George W. Bush’s eight years, it averaged 1.7 percent.

      Should the long-term decline in U.S. economic growth be attributed to cold weather? Or should people in Washington, D.C., start looking around them for an anthropogenic cause?

      1. Kinda leaving out the context there… that Obama was dealing with a world-wide economic crash precipitated by the parasite bankers and the softened regulation Bush gave them.

        1. Ever notice that it’s never Obama’s fault? Never, ever. It’s always Bush’s first, or something – anything – else. Very convenient.

          Here’s an idea: Obama had zero experience for the job and is therefore incompetent. His statist ideology and misguided belief in centralized big government is a proven failure that has placed tremendous drags on the economy.

          If a conservative president were to be elected, he/she would quickly unleash an economic boom that would make even a Reaganite blush and that would do more for rank and file blue collar democrats (and everyone else) than any Democrat could ever hope to provide via food stamps, welfare checks, and endless class/race war encitment.

          If you understand this, you’re already there. If you don’t, and you’re a U.S. voter, please try to get a clue before you head off to the polls trying to screw the country once again.

          1. You’re very funny. Well, not really. But nothing you said in any way contradicts what I said — that Obama was dealing with a world-wide economic crash precipitated by Bush and you’re much beloved de-regulation.

  2. The floods in Texas and Oklahoma will give a little boost. Also, the latest forecasts say this could be the worst El Niño since 1997-98 which means West Coast flooding and more rebuilding.

  3. Past recoveries, including Reagan’s, have been led by public (government) hiring. This recovery, by contrast, has been led by private hiring, and in many cases we have seen a decline in public hiring. Accordingly, this is likely a stronger structural recovery. Revenues are up, the deficit greatly reduced, and the likelihood of a bubble reduced. What is needed, is a massive infrastructure rebuilding campaign, which is one of government’s jobs.

  4. I blame the longshoremen for a lot of it. We have 100’s of millions of dollars of food rotting in containers that never got exported. Washington state is dumping thousands of containers of Apple’s (not the computer kind) and other produce into fields because of the strike.

    There is so many “real” world problems when people are starving and because the longshoremen unions want even more money. I don’t see Obama stepping in to stop it.

    That’s my 2 cents answer.

    1. Do you blame the companies that refused to hire their truck drivers as employees, instead classifying them as “independent contractors” so they could pay lower wages and exclude them from benefits and work rule protections? The people carrying the picket signs aren’t always the reason for the strike. They’ve just been backed into a corner by management malfeasance and corruption in the workplace.

    2. By longshoremen, I assume you mean the Manager’s Group. They are the ones who locked out the longshoremen and kept them from doing their jobs.

  5. What do you expect when you elect repuggs.
    Taxes have never been lower (in comparable dollars). The only song in the repuggs hymn book is lower taxes for the rich, cause. They’ve been singing this same verse forever. Don’t believe me, youtube George H.W. Bush’s father and just listen.
    The best repugg president we have ever had was George H. W. Bush. Faced with a need for revenue, he had sense enough to raise revenue.If you need money, you get money, if you need french fries you get potatoes.(what was his VP’s name)
    If he had not raised taxes, Clinton’s time in office would have been garbage.
    Pres. Bush, being rich himself, understood rich people. He knew they just sit on their money. example you say…
    donald ‘the got to be a rasist’ trump, goes on national tv and complains about wanting to buy american tvs for his hotels, with donald’s job creating money, why does he not start such a company, he knows other so called job creators, what the problem. ( i think the interviewer ask him )Hum.
    Why is donald trump not complaining about Cruz running for president. Yes,Yes,Yes. You may not come to the same conclusion, but it’s hard to see it any other way. I’m just writing.

  6. The Fed has been debasing our currency by creating “money” out of thin air and loaning it to the very banksters that fucked up the economy with predatory lending and slice and dice loan bundles for fun and profit for years now.

    People bitch about Bush’s $800 Billion TARP and Obama’s Similar sized stimulus, but the Fed loaned over 16 Trillion imaginary US Dollars to banksters at home and abroad through 2010 according to the one and only audit of the Federal Reserve. They have continued since then with Quantitative Easing- a.k.a. Creating even more imaginary money to buy up government debt to this very day.

    Not sure how long this house of cards can be sustained, but there will be a payday.

  7. “Republicans believe every day is the Fourth of July, but the democrats believe every day is April 15.”
    ― Ronald Reagan

    hahahaha i love that one

  8. Hope and change at work. When Reagan inherited a dismal economy in January 1981, the pain only lasted another couple years. By late 1983, the economy was growing again. We’re in the last half of Obama’s second term and the economy is still in the toilet. So many people have given up looking for work, that the government is able to falsely claim that unemployment is down. How’s that hope and change working out for you?

    1. Drunk are you?
      Don’t worried about it.
      We understand.
      I agree with BrightL George H. W. was way better then that Reagan guy. Even though Reagan raise taxes, he made people hate their country because of taxes. No, Bush way better!

        1. Good, because when you are wrong don’t waste your time.Bush was 100,000,000,000,000 times better. I know rose colored glasses maybe be a problem, but here’s a suggestion, take them out.

  9. All those who were high on Barack Obama’s foul fumes are having one bad day after another. All of his big talk – and the big talk of those who worshipped him – has turned out to be EXACTLY what we who can think predicted all those years ago.

    And yet, liberals still – STILL – cannot take ownership of their failures, and failure is all that liberals have to show for themselves.

    1. Come on, a little honesty here. The president has done a good job. Five repuggs have been running for the presidency ever since 2008 when he was elected. Lie, after lie, after lie about man is just crazy. The repuggs have no interest in helping him cause they must be against whatever he’s for. You know, to show contrast, I guess, and keep the suckers giving them money. If a repugg was in office you would be telling us how great a job he/she was doing. You don’t have to be fair, but the numbers are way better than when the second George left office. I suggest a new measuring stick. Yeah, stop watching fox, it will make you crazy. The banks are in better condition, the DOW in way higher, houses are selling, cars are selling, iPhones are selling, yes job hiring is up in private sector, dude give the man his do, all this without repuggs help. Those guys and ladies are just taking your tax dollars for doing nothing while running for president… man! If you can’t see it it’s ok.
      Just think, if the government could spend on infrastructure, the economy would be to hot to handle. Yes it’s needed yes it creates tons of jobs, but because President Obama is president, repuggs just don’t want him to have any credit.

    2. You’re not looking at the big picture, bereanbob. The hard economic data shows that during Obama’s presidency, the United States’ GDP growth has beat the GDP growth of the other original NATO member countries by the widest margin of any president since World War II. He inherited a huge mess, and has done better at getting out of it than any other NATO country. This despite remarkable opposition from the GOP. Many of the acts of congressional Republicans, such as forcing the sequester, bringing the country to the brink of default twice, shutting down the government and blocking a wide variety of legislation designed to minimize the risks posed by the financial sector or to create jobs, have caused harm to the economy and prevented the economy from healing as quickly as would be desirable.
      http://politicsthatwork.com/economic-record-president/obama

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.