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Contraction: Q1 GDP growth went negative in Q1

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Contraction: Q1 GDP growth went negative in Q1

GDP growth in Q1 revised to -0.7%.

US estimated real gross domestic product decreased at an annual rate of 0.7% in the first quarter, according to a revised estimate issued by the Commerce Department today.  The previous estimate for the quarter was an increase of 0.2%. This follows last year’s Q4 GDP growth of 2.2%. 

Economists had expected a revision to show negative growth of 0.8%.

Growth was dampened in the first quarter by the mixed impact of lower energy costs, as well as a now-resolved West Coast Port strike.  Harsh weather in January is also seen as having a negative effect.

However, there are signs that growth for the remainder of 2015, while not spectacular, may be more robust that the last two quarters might suggest.  The labor markets appear strong (although wage growth remains stagnant), and optimism for stronger demand – particularly in the important middle market – continues to grow.

The full report can be found here.

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