Source: John W. Schoen / MSNBC
Thanks to deeper-than-estimated cuts in government spending, the U.S. economy slowed faster in the first quarter than originally reported, the Commerce Department said Thursday, raising concerns that the U.S. could be at risk of following Europe back into recession.
Gross domestic product expanded at a 1.9 percent annual rate in the first quarter, less than the 2.2 percent the government had estimated last month. That compares to the 3.0 percent rate set in the fourth quarter of last year.
“The GDP number isn’t a surprise, but anytime you dip under two percent we always head into recession,” said Todd Schoenberger, an investment adviser at The Blackbay Group. “The final read will be much more important. It doesn’t look good for the economy right now.”
Much of the downward revision to GDP was the result of a steeper drop in government spending, which fell at a 3.9 annual percent rate, instead of the previously reported 3.0 percent.
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