The U.S. economy shrank for the first time in three years during the first quarter, according to government data released Thursday morning, but many analysts believe the recovery has already regained its mojo.
Businesses depleted their inventories and cut back on investment in the first three months of the year, while harsh winter weather curtailed construction. As a result, the nation's gross domestic product fell at an annualized rate of 1 percent. The government's previous estimate had showed the economy essentially flatlining.
The decline highlights the fragility of the nation's recovery but is not likely to derail it altogether. Several forecasts for the current quarter show the economy growing at a healthy 3 percent annual rate or faster.
"I think it just frankly coils the spring even tighter for a snapback this quarter," said Stuart Hoffman, chief economist at PNC Financial Services. "Boiiiing."
Wall Street shrugged off the report as old news. The major U.S. stock indexes were slightly up in mid-morning trading, with the tech-heavy Nasdaq leading the way with a 0.2 percent gain.
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