Worst Quarter Since 2009

Today the Bureau of Economic Analysis updated its 2014 first quarter economic report. The economy shrank at a staggering 2.9 percent annualized rate, down from the previous estimate of shrinking 1.0 percent. The White House’s projection of 3.1 percent growth for all of 2014 now seems like a pipe dream. CBO’s more modest projection for 2.7 percent growth in 2014 also will be very hard to meet. Looking back at the last three quarters: the economy has actually shrunk in inflation-adjusted terms since the third quarter of 2013.

While the economy has never been robust during the Obama presidency, this is the worst quarter for GDP since Q1 2009, the end of the recession. Before the financial crisis, the last time America’s economy had performed so poorly was the fourth quarter of 1990. Including the financial crisis, this is one of the 12 worst quarters since 1947 (the first year for which data is available).

The slump in GDP last quarter was caused by a steep drop in private economic activity. Gross private domestic investment shrank 11.7 percent, and exports decreased 8.9 percent. While the winter weather may have contributed to these decreases, the data underscore the damage that Democrat policies -- overregulation and the threat of burdensome tax increases -- can do to America’s economy.

Q1 2014 Change in GDP by Category