US Economy Shrinks More Than Expected

A sign sits in front of a new home for sale in West Des Moines, May 21, 2014, Iowa.

The U.S. economy shrank more than first thought at the beginning of this year.

Wednesday's report from the Commerce Department says the economy shrank at a 2.9 percent annual pace in January, February, and March.

That is much worse than earlier estimates, and the worst economic growth figures in five years. U.S. officials routinely revise economic estimates as new, more complete data becomes available.


Economists blame the slowdown on unusually foul winter weather, and many predict the problem will be temporary.

US GDP first quarter contraction

A top White House economic advisor, Jason Furman, says data from April and May show the economy is on track to resume growing soon.

However, a second economic study published Wednesday, went against that trend, showing orders for long-lasting manufactured goods unexpectedly fell in May.