The data was released Friday along with the government’s first estimate of second quarter GDP, which advanced at a meager and weaker-than-expected 1.3 percent rate
Not only did the economy skirt perilously close to a contraction in the first quarter, growth in the fourth quarter of last year was at a tepid 2.3 percent annual rate, not the solid 3.1 percent pace that had been believed.
The downward revision to the first quarter was even sharper.
Previous figures had shown the economy advanced at a 1.9 percent rate. [First quarter figures were revised to 0.4% growth.]
A combination of bad weather, high gasoline prices and disruptions to manufacturing after the March earthquake in Japan had been blamed for this year’s slowdown.
But the surprisingly weak tone in the data so far this year and the downward revisions to growth in the fourth quarter before those headwinds hit suggest those transitory factors bear less of the blame than thought.
Read the whole thing here.