“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.
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