Gross domestic product fell at a 1 percent rate in the first quarter, according to revised Commerce Department figures released yesterday. It was the first time the economy contracted since the first quarter of 2011.
“The good news: Much of the decline was due to less inventory building that economists say can’t last. As a result, some are boosting second-quarter growth forecasts, with Morgan Stanley projecting a 4.2 percent gain,” Bloomberg’s Jeanna Smialek and Rich Miller reported.
Bloomberg surveyed 72 economists from May 2 to May 7.
Jason Furman, chairman of President Barack Obama’s Council of Economic Advisers, attributed the downward revision in GDP “almost entirely” to the changes in the “highly volatile inventories category.”
“A range of more up-to-date data from March and April, including jobs, manufacturing, housing and other indicators, provide a more accurate and timely picture of where the economy is today and show that it continues to recover from the worst recession since the Great Depression,” Furman said in a statement.
House Speaker John Boehner, an Ohio Republican, used the news of the GDP revision to press the Democratic-run Senate to take up some jobs-related bills the House passed.