Revising its early numbers for the first quarter of 2014, the Commerce Department says the U.S. economy shrank by 1 percent at an annualized rate. Last month, estimates of the quarter's gross domestic product had shown a small gain of 0.1 percent.
Government analysts blame the slump on "a significant decline in inventory investment," especially among car dealerships. They also say U.S. exports declined along with spending on housing and government programs.
"Economists estimate severe weather could have chopped off as much as 1.5 percentage points from GDP growth," reports CNBC. "The government, however, gave no details on the impact of the weather."
Corporate profits also declined in the quarter, the Bureau of Economic Analysis says, after showing gains in the previous quarter.
"Profits of nonfinancial corporations fell 8.1 percent after rising 1.5 percent," the agency says. "Profits of financial corporations fell 15 percent after rising 1.3 percent."
The new quarterly GDP data came out along with news from the Labor Department that weekly jobless claims fell by 27,000 last week, to 300,000.
"Fewer dismissals may be a sign that companies, already lean from recession-era job cutting, are gearing up for improving demand as the economy shows signs of rebounding from a first-quarter slump," Bloomberg News says.