ECONOMY

US economy shrank at 0.7 percent rate in Q1, reflecting harsh winter and bigger trade gap

The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially estimated.

The Commerce Department says the overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period.

The revised figure, even weaker than the government's initial estimate of a 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending.

It marked the first decline since a 2.1 percent contraction in the first three months of 2014, a slump that was also blamed on winter weather.

Economists expect a rebound in the current quarter to growth of around 2 percent and expect the economy to strengthen later this year.