Today the Bureau of Economic Analysis (BEA), the agency of the US Department of Commerce that provides important economic statistics, including the gross domestic product of the United States, reported that in Q1 2014 the GDP fell 2.9%, far worse than anticipated. Last quarter, the GDP rose 2.6%.
Gross Domestic Product (GDP) is the market value of all officially-recognized final goods and services produced within a nation over a given period of time. GDP per capita is often used as an indicator of a country's material standard of living.
The BEA has previously estimated that the Q1 GDP would drop 1%. The Wall Street Journal characterized the 2.9% drop as the "sharpest pullback" since the generally-acknowledged end of the Great Recession five years ago.
"GDP was recession-like in the first quarter, although most other data clearly signal that the decline is an outlier," Jim O' Sullivan, an economist at High Frequency Economics, told the Journal.
Analysts blame poor weather in the continental US, negatively affecting production, construction, and shipping, for the unexpected plummet. Personal consumption and exports were lower than anticipated. However, growth in GDP is expected for Q2 2014, as home construction and sales, and auto sales, should rebound.
The market dipped slightly Wednesday on the news, but recovered.
The price index for gross domestic purchases, which represents how much you'll pay for goods down at the store, increased 1.3% as expected. Chronic unemployment and stagnant incomes continue to negatively impact consumer spending, which accounts for more than two thirds of US economic output.
The BEA's estimates for Q2 2014 will be released July 30th.