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Economy Contracted at 0.7 Percent Rate in First Quarter

The U.S. economy went into reverse in the first three months of this year.
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/ Source: Associated Press

The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially estimated.

The overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period, the Commerce Department reported Friday.

The revised figure, even weaker than the government's initial estimate of a 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending. It marked the first decline since a 2.1 percent contraction in the first three months of 2014, a slump that was also blamed on winter weather.

Economists expect a rebound in the current quarter to growth of around 2 percent and expect the economy to strengthen later this year.