US 1Q 2014 GDP decline twice as bad as analyst estimates, shrank 1%, inventory investment revised down esp. for retail and manufacturing- AFP. Without taxpayer transfers to ObamaCare subsidies, drop would be 2%

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May 29, 2014, "US economy shrank one percent in first quarter," AFP, Washington

"The US economy contracted at an annual rate of 1.0 percent in the first three months of 2014, a significantly weaker performance than initially estimated, official data showed Thursday.

It was the first time the world's largest economy shrank since the 2011 first quarter. The contraction was twice as strong as analysts' consensus estimate. 

The Commerce Department previously estimated gross domestic product (GDP) grew a tepid 0.1 percent in the first quarter that was marked by unusually severe winter weather.

The weakness was more than accounted for by a marked decline in inventory investment, especially by motor vehicle dealerships, the Commerce Department said.

Inventory investment was revised down, particularly in retail trade, manufacturing, mining, utilities and construction.

Excluding inventory investment, GDP grew 0.6 percent in the first quarter.

Imports, which subtract from GDP, were revised higher.

Also contributing to the fall in GDP were declines in exports, business investment, state and local government spending and housing investment.

"Ouch. The bad news is that the headline GDP number is worse than consensus, but the good(ish) news is that almost all the hit is in the inventory component," said Ian Shepherdson of Pantheon Macroeconomics in a research note.

Analysts view the first-quarter slump as largely winter weather-related after the economy grew 2.6 percent in the 2013 fourth quarter. Economic indicators have pointed to a rebound in activity in the second quarter.

"We still think Q2 growth of about 3.0 percent is a decent bet," said Shepherdson."

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Without 1Q artificial stimulus of $40 billion taxpayer dollars transferred to ObamaCare subsidies, the drop is 2 percent:

5/29/14, "Excluding Obamacare, US Economy Contracted By 2% In The First Quarter," Zero Hedge

"As if the official news that the US economy is just one quarter away from an official recession...- supposedly harsh weather somehow managed to wipe out $100 billion in economic growth from the initial forecast for Q1 GDP - here is some even worse news: if one excludes the artificial stimulus to the US economy generated from the Obamacare Q1 taxpayer-subsidized scramble, which resulted in a record surge in Healthcare services spending of $40 billion in the quarter, Q1 GDP would have contracted not by 1% but by 2%!

The history of healthcare spending's contribution to GDP. The outlier needs no highlighting:"...Data source, Dept. of Commerce



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