WASHINGTON — The U.S. economy was battered even more than first suspected by the harsh winter, actually shrinking from January through March. The result marked the first retreat in three years, but economists are confident the downturn was temporary.
Gross domestic product contracted at an annual rate of 1 percent in the first quarter, the Commerce Department said Thursday. That was worse than the government's initial estimate last month that GDP during the period grew by a slight 0.1 percent. The economy last posted a decline in the first three months of 2011 when it dropped 1.3 percent.
This year's weakening reflected slower stockpiling by businesses, a cutback in business investment and a wider trade deficit. Economists expect a robust rebound in the April-June quarter as the country shakes off the effects of a severe winter.
The government released a separate report Thursday that showed applications for unemployment benefits, a proxy for layoffs, fell by 27,000 last week to 300,000. The result is nearly a seven-year low.