Economy Contracts in First Quarter

So the conflicting jobs numbers for the first few months of this year just got some company in the way of mixed economic signals, per this report from the New York Times‘ Nelson Schwartz:

The economy got off to an even weaker start this year than first thought, the government reported Friday, as economic activity contracted amid a disappointing trade picture and continued caution on spending by businesses and consumers alike.

The 0.7 percent decline in economic output in the first quarter of 2015 was a reversal of the initial 0.2 percent advance for the period reported last month by the Commerce Department.

While statistical quirks and one-time factors like wintry weather in some parts of the country played a role, as did a work slowdown at West Coast ports, the lackluster report for January, February and March underscores the American economy’s seeming inability to generate much momentum.

As is always the case these days, sorta bad news, especially when it is anticipated, can be sorta good news, too, if you fear the recovery-crushing interest rate hike so many conservatives are agitating for out of alleged concern about imaginary inflation:

Most experts had expected Friday’s data to show a contraction in the first quarter, and virtually no mainstream economists believe the country is on the verge of a recession. Still, the weakness is a reason the Federal Reserve is not expected to raise short-term interest rates until the second half of 2015, after speculation that a June increase was possible.

Damned if you do, damned if you don’t, economy.

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Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.