A first-quarter contraction is looking more and more likely.
A couple weeks ago, the Commerce Department said U.S. economic output expanded at a seasonally adjusted annual rate of 0.1% in the first three months of the year. A near-stall for the economy, for sure, but at least it wasn’t worse.
That initial estimate was the government’s best guess, using the data available at the time. Based on more up-to-date figures, including the March trade data released last week, private forecasters now expect gross domestic product contracted in the first quarter for the first time in three years.
The latest evidence came Tuesday, when the Commerce Department released reports on retail sales and business inventories. Retail sales in February and March were revised up, but business inventories grew less in March than the agency had assumed in its GDP calculations.