The U.S. economy shrunk by 1% in the first quarter of 2014, according to government data released Thursday, marking the first economic contraction in three years.
The figure, from revised estimates released by the Commerce Department, was revised downwards from an earlier estimate of 0.1% growth in gross domestic product, as government economists took stock of additional glum measures. The Commerce Department noted that on top of a winter wallop to retail and construction, real GDP was dragged down further by a rise in imports and a marked decline in inventory growth. The last time real GDP contracted was in the first quarter of 2011 at the tail end of a punishing recession.
Corporate profits also declined by an estimated 9.8%, the largest drop recorded by the Commerce Department since the fourth quarter of 2008.
Still, analysts predicted that the contraction, while unsettling, would not last into the second quarter. Recent monthly data points to signs of economic life, including a drop in jobless claims and jumps in durable good orders and retail sales.