Economists brush off dire GDP: ‘This is a blip’

By Peter Schroeder and Vicki Needham - 06/25/14 02:30 PM EDT

Economists and financial experts are bullish on the economy despite the stunning drop in gross domestic product reported for the first quarter of the year.

The Commerce Department on Wednesday reported that the gross domestic product (GDP) shrank by 2.9 percent in the first three months of 2014, far worse than the 2 percent contraction that had been expected.

The GDP number was the worst for the U.S. since the first quarter of 2009, when the country was mired in a deep recession.

But experts tracking the economy closely said the dismal report is no reason to panic, and argue the recession-era number can be attributed to a number of one-off factors, including harsh winter weather, a decline in exports exacerbated by global turmoil, and an expected spike in healthcare spending that never materialized.
“It was ugly reading, but I think it was a combination of a lot of one-off negative impacts that all hit at the same time,” said Scott Anderson, chief economist for Bank of the West.



Read more: http://thehill.com/policy/finance/210563-economists-brush-off-dire-gdp-this-is-a-blip#ixzz35hnQT2v3