The U.S. economy sank at a 5.7-percent rate in the first quarter, slightly less deep than the 6.1-percent annualized decline estimated last month, the Commerce Department reported Friday.
Despite the slight improvement, the first-quarter performance was still grim. It marked the second straight quarter where the economy took a big hit. At the end of 2008, the economy shrank at a whopping 6.3-percent pace, the most in 25 years.
In the first quarter, American consumers, who had tightened their purse strings for two consecutive quarters, boosted their spending by 1.5 percent but less than the 2.2-percent growth rate estimated a month ago.
"The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, equipment and software, private inventory investment, nonresidential structures, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures," the Commerce Department said.
Meanwhile, business spending on equipment and software plunged 33.5 percent. That was steeper than the 28.1-percent drop in the final quarter of last year and the most since the first quarter of1958.
Builders also slashed spending on commercial construction projects by 42.3 percent, much bigger than the 9.4-percent decline in the previous quarter.
Businesses also reduced spending on home building by 38.7 percent on an annualized basis. That was the biggest cut since the second quarter of 1980.
Exports in the January-to-March period plummeted at a 28.7-percent pace, following the 23.6-percent plunge in the prior quarter. Imports fell 34.1 percent after a 17.5-percent decrease in the fourth quarter.
Federal spending decreased by 4.3 percent in the first quarter while state and local government outlays declined 2.9 percent.
Source: Xinhua
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