Washington, DC, United States (4E) – The U.S. economy posted its worst performance in five years in the first three months of 2014, according to Commerce Department figures released Wednesday.
The gross domestic product (GDP) slid at an annualized rate of 2.9 percent in the first quarter of 2014, based on the agency’s third estimate.
The result is worse than the earlier estimate of a 1 percent contraction, and also worse than forecasts by economists. The economy is predicted to have posted a sharp rebound during this year’s second quarter.
The Obama administration said the results suggest that the economy is still in the process of recovery, but also said that other indicators for April and May suggest a recovery in the April to June period.
The report cites the severe winter as the main factor for the poor performance of the economy in the second quarter. The gap between the second and third estimates of the first-quarter GDP was the widest on record.
The latest revision came amid slower spending for healthcare than previously assumed, which resulted to downgrading of the estimate for consumer spending.