WASHINGTON — The U.S. economy contracted at a worse pace than previously estimated in the first quarter, marking its sharpest pullback since the recession ended five years ago.
Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department’s third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.9%.
Commerce had previously estimated output fell by 1% in the first quarter as manufacturers drew down inventories rather than produce new goods and as unusually harsh weather kept consumers at home and shut down work sites. Exports also declined after a surge late last year.
In its third GDP reading, based on newly available data, Commerce said first-quarter consumer spending and exports were even weaker than previously estimated.
Economists surveyed by The Wall Street Journal had predicted Wednesday’s report would revise GDP growth down to a 2% decline.
The economy’s first-quarter stumble has once again dashed hopes the recovery was in the process of switching into a higher gear. Early second-quarter data indicates the economy has improved this spring as warmer weather helped release some pent-up demand. Macroeconomic Advisers recently forecast the economy will grow at a 3.6% annual rate in the April to June period.