Bounceback for U.S. economy expected in spring quarter
All it took was an icy wind from the Arctic to topple the economy into its worst contraction since the depths of the Great Recession of 2007-2009.
That’s what the latest report from the Commerce Department showed Wednesday, revealing a shocking 2.9 percent drop in economic output during the winter quarter that amounted to the biggest loss of economic traction since the first quarter of 2009, when the economy and financial markets were in free fall.
The aftermath won’t be anywhere near as severe this time, however, according to the majority of economists who blame the rare one-quarter collapse of economic growth on the “Arctic vortex,” which brought a deep freeze and icy conditions to most of the country and prompted consumers and businesses — the main engines of economic growth — to go into hibernation for much of the quarter.
For one thing, rather than lose a breathtaking 2.3 million jobs during the quarter, as the economy did in early 2009, the economy actually generated nearly 600,000 jobs during the past winter quarter — showing that the one-time deep contraction did not reflect the economy’s underlying health and vitality, they say.
“This was as much a weather-induced bump in the road as it was the economy hitting the reset button following a second half of 2013 where growth clocked in at an unsustainable 3.3 percent average,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
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Winter wipeout: Economy shrank 2.9 percent in first quarter - Washington Times
All it took was an icy wind from the Arctic to topple the economy into its worst contraction since the depths of the Great Recession of 2007-2009.
That’s what the latest report from the Commerce Department showed Wednesday, revealing a shocking 2.9 percent drop in economic output during the winter quarter that amounted to the biggest loss of economic traction since the first quarter of 2009, when the economy and financial markets were in free fall.
The aftermath won’t be anywhere near as severe this time, however, according to the majority of economists who blame the rare one-quarter collapse of economic growth on the “Arctic vortex,” which brought a deep freeze and icy conditions to most of the country and prompted consumers and businesses — the main engines of economic growth — to go into hibernation for much of the quarter.
For one thing, rather than lose a breathtaking 2.3 million jobs during the quarter, as the economy did in early 2009, the economy actually generated nearly 600,000 jobs during the past winter quarter — showing that the one-time deep contraction did not reflect the economy’s underlying health and vitality, they say.
“This was as much a weather-induced bump in the road as it was the economy hitting the reset button following a second half of 2013 where growth clocked in at an unsustainable 3.3 percent average,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
more
Winter wipeout: Economy shrank 2.9 percent in first quarter - Washington Times
