By Peter Schroeder - 06/25/14 08:48 AM EDT
The U.S. economy felt the worst aftershock of the recession yet in the first quarter of the year, shrinking 2.9 percent.
The third and final revision of Commerce Department data shows the quarter, weighed down by a brutal winter, was even worse economically than previously thought. The government had estimated the economy shrank by 1 percent in the first three months of the year.
The last time the economy shrank by so much was in 2009, when the nation was still in the midst of recession.
Spending, which accounts for roughly 70 percent of economic activity, was up 1 percent in the first quarter, compared to 4.4 percent at the end of 2013. The government previously estimated consumer spending grew at a 3.1 percent rate in the first quarter.
The economy grew 2.6 percent in the fourth quarter of 2013, and many economists hope that the dramatic downturn at the outset of 2014 was largely driven by a record-breaking winter that slowed a lot of economic activity.
The Federal Reserve said earlier this month that economic activity had “picked up” since the winter, as the central bank stuck with its plan to exit its bond-buying stimulus effort slowly.
Federal Reserve Chairwoman Janet Yellen struck an uncertain but optimistic note about the trajectory of the economy at a press conference following the Fed’s latest stimulus announcement.
“There is uncertainty, but I think there are many good reasons why we should see a period of sustained growth,” she said.