Why the US economy plunged 3% in the first quarter

Weather, statistics, growth instability and other factors that influenced the maximum quarterly collapse of US GDP over the past 5 years. What negative news will turn for Russia?

US GDP in the first quarter of 2014, according to the final estimate, decreased by 2.9% compared to the same period of 2013. This is evidenced by data from the Bureau of Economic Analysis, US Department of Commerce. Analysts polled by Bloomberg, on average, expected a 1.8% decline in GDP in Q1 against the final estimate versus a 1% decline in GDP according to a revised estimate.

Why the US economy plunged 3% in the first quarter

Forbes Peter Rudenko Forbes Contributor, Alexander Krasnova Forbes Contributor, Anton Verzhbitsky Forbes Contributor

Weather, statistics, growth instability and other factors that influenced the maximum quarterly collapse of US GDP over the past 5 years. What negative news will turn for Russia?

US GDP in the first quarter of 2014, according to the final estimate, decreased by 2.9% compared to the same period of 2013. This is evidenced by data from the Bureau of Economic Analysis, US Department of Commerce. Analysts polled by Bloomberg, on average, expected a 1.8% decline in GDP in Q1 against the final estimate versus a 1% decline in GDP, according to a revised estimate.

In a press release, the Ministry of Trade of the United States indicated that the fall in GDP was due to a decline in exports by 0.6%, personal consumer spending by 2.3%, a decline in investment in new production by 4.5%, a decrease in municipal and government spending. Also in the first quarter of 2014, corporate profits fell by $ 52.6 billion compared with an increase of $ 6.1 billion in the fourth quarter of 2013.

Joe Lavon, chief economist at Deutche Bank for the United States, calls unusual a sharp reduction in US GDP without recession. «There are only two quarters in the past, when we saw the same decline, when the economy was not in a state of recession, — IV quarter of 1949 (-3.5%) and II quarter of 1981 (-2.9%), the analyst notes . According to Deutsche Bank estimates, the fall in GDP is also due to a decrease in health expenditure. In this case, the bank expects US GDP growth in the second quarter by 4.2%.

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