us economy goes into reverse as fears grow over recovery

8/12/2019 US Economy Goes Into Reverse as Fears Grow Over Recovery

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US economy goes into reverse as fears grow over

recoveryUS economy shrinks in first quarter for the first time in three years, raising

doubts over Federal Reserve's next moveRevision to US GDP has spooked markets on Wall Street sending the dollar lowerPhoto: AP

ByKatherine Rushton,US Business Editor

29 May 2!"

#he Ameri$an e$onomy went into reverse in the %irst three months o% the year& new%ig'res reveal& stoking %ears that the US re$overy is still m'$h more %ragile than hoped()%%i$ials had tho'ght that US Gross Domesti$ Prod'$t *GDP+ grew ,y the miserlye-'ivalent o% (!p$ a year in the %irst -'arter& ,'t revised %ig'res released on #h'rsdayshowed it had a$t'ally shr'nk ,y the ann'al e-'ivalent o% !p$ . the %irst time it hasreversed in three years(#he $ontra$tion marks a startling $hange %rom the previo's two -'arters& when thee$onomy grew at the ann'al e-'ivalents o% 2(/p$ and "(!p$ respe$tively(#he %all is also m'$h sharper than e0pe$ted( 1$onomists were prepared %or the (!p$
http://www.telegraph.co.uk/finance/economics/10862999/US-economy-goes-into-reverse-as-fears-grow-over-recovery.htmlhttp://www.telegraph.co.uk/finance/economics/10862999/US-economy-goes-into-reverse-as-fears-grow-over-recovery.htmlhttp://www.telegraph.co.uk/journalists/katherine-rushton/http://www.telegraph.co.uk/journalists/http://i.telegraph.co.uk/multimedia/archive/02569/newyork_2569619b.jpghttp://www.telegraph.co.uk/journalists/katherine-rushton/http://www.telegraph.co.uk/finance/economics/10862999/US-economy-goes-into-reverse-as-fears-grow-over-recovery.htmlhttp://www.telegraph.co.uk/finance/economics/10862999/US-economy-goes-into-reverse-as-fears-grow-over-recovery.html


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%ig're to ,e revised downwards& ,'t most tho'ght the worlds largest e$onomy hadshr'nk ,y aro'nd ("p$& a$$ording to $onsens's %ig'res $ompiled ,y 3loom,erg(#he US re$overy took a ,a$kwards step in the %irst -'arter& most likely the res'lt o%many parts o% the $o'ntry having ,een ,attered ,y e0treme weather&4 said 5hrisWilliamson& $hie% e$onomist at Markit( 67owever& $'rrent indi$ators s'ggest this wasmerely a temporary set,a$k in an otherwise ro,'st re$overy& pointing to a strong

re,o'nd in the se$ond -'arter(4

#he likely re,o'nded has immediately %'elled e0pe$tations that the US 8ederalReserve $o'ld raise interest rates ,e%ore the s'mmer(1$onomists said Ameri$as 'n's'ally ,itter winter kept $ons'mers away %rom theshops and made $ompanies hesitant a,o't making large $apital o'tlays( #he revised%ig'res showed ,'sinesses were even more 'nnerved than %irst tho'ght( 3'sinessspending %ell ,y !(/p$& in$l'ding a (p$ drop in o'tlays on o%%i$e ,'ildings(5ompanies also spent less on sto$kpiling 6inventory4& or goods to sell %'rther down theline& as they sold o%% prod'$ts they had already hoarded in the previo's two -'arters(7owever& the ,a$klog was not as ,ad as %eared(#here were also some ,right spots to the harsh $onditions& as people paid more %orho'sing and 'tilities s'$h as heating( #hey also dramati$ally in$reased spending onhealth$are& as they h'rried to enroll on President ),amas %lagship A%%orda,le 5are

A$t . adding the e-'ivalent o% a %'ll per$entage point to ann'alised GDP(

Economy expands !" percent in F#$, looks to

%odi for rebound& orker loads bricks onto a vehicle near a construction site of a residential complex in (e )elhi %ay *+, +$!

3; RA?G7@Fri May 30, 2014
http://in.reuters.com/article/2014/05/30/india-economy-gdp-idINKBN0EA16420140530http://in.reuters.com/article/2014/05/30/india-economy-gdp-idINKBN0EA16420140530http://in.reuters.com/article/2014/05/30/india-economy-gdp-idINKBN0EA16420140530http://in.reuters.com/article/2014/05/30/india-economy-gdp-idINKBN0EA16420140530


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-Reuters. / 0ndia's economic groth picked up marginally from a decade lo in the

fiscal year ended %arch, but pro/business (arendra %odi's thumping victory in the

recent general election has stoked optimism of an investment/led turnaround in the

coming quarters!

&sia's third/largest economy gre !" percent in +$*1$, sloer than an officialestimate of !2 percent and higher than !3 percent groth a year earlier! 0t marks the

second straight year of sub/3 percent groth / the orst slodon in more than a

quarter of a century!

Economic groth for the quarter to end/%arch came in at !4 percent from a year

earlier, compared ith !5 percent estimated by analysts in a Reuters poll and a

revised !4 percent groth in the previous three months!

67e are not able to yet see!!!ho the economy ill gro but certainly the mood isupbeat,6 said &!%! (aik, chairman at the country's biggest engineering firm 8arsen 9

:oubro, ho expects groth to pick up to 3!3 percent this fiscal year!

;roth stuck belo 3 percent is disappointing for an economy that boasted of a near

double/digit economic expansion until a fe years back and as idely expected to be

one of the main drivers of the global economic recovery!

0t also poses a challenge for the ne government to generate enough


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=apital investment contributes nearly *3 percent to 0ndia's economy, but it contracted

an annual +!$ percent in the fiscal year that ended in %arch!

@ro


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hich could hit farm output and fuel inflation! :hat ould make it tougher for an

inflation/focused central bank to loer interest rates to support groth!

@ersistently high inflation and elevated interest rates have crimped consumer demand!

=onsumer goods output, a proxy for consumer demand, has gron '(eill coined the term BR0= in )ecember ++$ to

us economy goes into reverse as fears grow over recovery

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