Gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop, the Commerce Department said today in Washington. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976. The revision reflected a slowdown in health care spending.Let's put this into perspective: since WWII the country has only experienced negative GDP rates six times outside of a recession, and two of those times (Q3'73 and Q2'81) immediately preceded recessions.
In response economists are actually increasing their economic forecasts for the year.
“For the second quarter, we’ll see some weather rebound and a return to more normal activity after that long winter.”Ah yes. It was all the weather, because its never been that bad before. Right?
A massive winter storm some are dubbing "Snowpocalypse" is unleashing a hodgepodge of brutal weather — sleet, ice, wind and loads of snow — on the U.S. Midwest as it moves across the country to the Northeast and Canada later Tuesday night.A Snowpocalypse! That's sounds like the worst weather that has ever happened.
But that news story was from 2011, not 2014.
And then there is this headline: Snowpocalypse 2012? (still on track for biggest snowfall of winter)
And then finally we have this article
"Snowmageddon" 2013, the powerful winter storm that hit the northeastern part of the United States on Friday, has turned deadly, claiming the lives of at least nine people.So two "Snowpocalypse" couldn't stop the U.S. economy, and neither could a "Snowmageddon", but a "Polar Vortex" could.
Right. Color me dubious.
Economies don't shrink by 3% because of a blizzard. They already have seasonal adjustments in all their economic reports. Something more serious is going on under the hood.
So what was the latest reason for the downward revision?
Net exports subtracted 1.53 percentage points from GDP, reflecting the ongoing depression in Europe and the credit crunch in China.
But the biggest surprise was Obamacare.
The Bureau of Economic Analysis had estimated that major provisions of President Obama’s signature health care law would boost outlays. A quarterly services survey released this month showed the assumptions were too optimistic. Outlays for health spending actually slowed in the first quarter, subtracting 0.16 percentage point from GDP. The Commerce Department previously estimated those outlays added 1 percentage point to GDP.