First-quarter GDP falls the most in five years

[WASHINGTON] The US economy contracted at a much steeper pace than previously estimated in the first quarter to record its worst performance in five years, but there are indications that growth has since rebounded strongly.

The Commerce Department yesterday said that gross domestic product (GDP) fell at a 2.9 per cent annual rate, instead of the one per cent pace that it had reported last month.

While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revision suggests other factors at play beyond the weather. Growth has now been lowered by a total of three percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 per cent rate.