The U.S economy shrank in Q1 but rebound seen

The U.S economy is seen to have contracted in the first quarter after unexpected heavy snowfalls and a revived dollar.

However, this slump has proved to be short-lived as activities moderately rebound.

According a to Reuters survey, the gross domestic product is expected to have shrank at the rate of 0.8% compared to a 0.2% increase forecasted last month.

A decline in GDP is usually is strong indicator of recession, however, economists have shown little concern for this matter.

This is because for the coming months, they predict stronger GDP data as job claims become more stable.

The unemployment rate should probably decline to a seven year low, at 5.4%, ensuring that people would have more money in hands.

As the harsh winter is gone now, business activities and investments are picking up.

But, economists affirmed that the government may have underestimate the US economic growth for Q1.

As per analysts, the economy is foreseen to be growing at an annual rate of 2 to 2.5% for the April-June period, strengthening further for the rest of the year.

Priscilla Camryn By: Priscilla Camryn
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