U.S. gross domestic product fell at an annual rate of 2.9 percent in the first quarter of 2014 which is below the initial estimate and the sharpest decrease since 2009, official data showed Wednesday.
In the fourth quarter of 2013, real GDP increased 2.6 percent.
The Department of Commerce said that the GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month.
In the second estimate, real GDP was estimated to have decreased 1.0 percent.
The Commerce indicated with the third estimate for the first quarter, the increase in personal consumption expenditures (PCE) was smaller than previously estimated, and the decline in exports was larger than previously estimated.
In this regard, Jason Furman, Chairman of the Council of Economic Advisers, said in a statement that first-quarter GDP was revised down today, "largely reflecting a re-estimation of consumer spending on health care, which was substantially lower than originally reported, as well as exports, which were below the initial estimates." "The GDP data can be volatile from quarter to quarter;" and that "the recovery from the Great Recession, however, remains incomplete," Furman stressed.
Furman affirmed that U.S. President Barack Obama "will continue to do everything he can to support the recovery, either by acting through executive action or by working with Congress on steps that would boost growth and speed job creation." The entire decline in overall GDP in the first quarter can be accounted for by a decline in exports and a slowdown in inventory investment, "two particularly volatile components of GDP." In addition, several components were likely affects by "unusually severe winter weather, including consumer spending on food services and accommodations, which fell for the first time in four years." Meanwhile, the Department of Commerce showed in a separate report that new orders for manufactured durable goods decreased USD 2.4 billion or 1.0 percent in May, reaching USD 238.0 billion.
This decrease, down following three consecutive monthly increases, followed a 0.8 percent April increase.
Excluding transportation, new orders decreased 0.1 percent, whereas excluding defense, new orders increased 0.6 percent.
It noted that transportation equipment, also down following three consecutive monthly increases, led the decrease, USD 2.3 billion or 3.0 percent reaching USD 74.4 billion