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US economy contracted by 0.7 percent last quarter
The U.S. Economy started off even slower in 2015 than experts first thought. In its first report the U.S. Bureau of Economic Analysis explained that the nation's economy only grew by about 0.2 percent in the first quarter of 2015. However, in its revised second report the BEA put the growth at a negative 0.7 percent.
The second report, traditionally more accurate than the first, said that the economy contracted to start off the year. Although there is a third and final report still to come about the first quarter at the end of June, which is official and most accurate, this news is not promising for most business professionals.
Why is the economy contracting?
The U.S. economy in January, February and March was affected by a number of unfortunate events, The New York Times explained. However, although the severe winter weather throughout most of the country affected businesses and there was slower than normal port activity on the West Coast because of labor issues, the Times pointed to this report as a sign of more broad economic failure to build "momentum."
"The U.S. Economy contracted by 0.7% in Q1."
Some of the biggest impacts on these economic numbers were the trade difference, low oil prices and the strong U.S. dollar. The Times reported that many expect the trade statistics to return back to normal in the second quarter of 2015, but there are a number of unknowns.
"Anybody estimating gross domestic product for the second quarter is kidding themselves, because the trade data is so unpredictable at the moment, and we have no hard numbers yet," Ian Shepherdson of Pantheon Macroeconomics told the newspaper. "I'm guessing there will be a reversal in trade flows, and we'll see 3 percent growth in the second quarter. But it could be anywhere between 1 percent and 5 percent."
Forbes magazine also noted that these numbers are indicative of a greater economic trend. It explained that the economy has been slow since 2009 and these business trends will likely continue. Forbes contributor and economic analyst Mike Patton explained that the only way he expects the economy to recover is if more pro-business politicians get into office and change policies and regulations.
"A weak economy is never good for anyone, including those who believe the rampant demagoguery of the day. It's time to slash the soundbite and install statesmen (and women) who will put the interests of the country ahead of personal gain," he wrote.
Contraction may not be anything to worry about
After the BEA statistics were released detailing the economic contraction, USA Today reported that most economists aren't overly concerned. The economy is still on pace to grow about 2 to 2.5 percent this year. Additionally, they said that the major factors that led to the contraction aren't lasting issues, specifically weather and labor disputes.
Although the oil prices and strong dollar are going to persist longer, the economists tell USA Today that the economy will likely rebound in quarter two. Other indicators that were recently released pointed to increases in hiring and earning among U.S. workers.
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