(BusinessWeek) Last week we learned that the U.S. economy grew a meager 0.1 percent during the first three months of the year. The news was met by a collective groan and some head-scratching over how a bout of bad weather could put the world’s largest economy on its back. As sad as it sounds, that estimate is actually starting to look overly optimistic.
Subsequent data have a number of economists wondering if the economy actually shrank during the first quarter. Here’s how perma-bull Joseph LaVorgna, chief U.S. economist at Deutsche Bank, explained it in a note to clients: “Weaker data on construction spending, inventories and net exports imply that Q1 [gross domestic product] will now show a contraction.” LaVorgna now suspects the economy notched a -0.8 percent growth rate during the first three months of the year. Paul Ashworth, chief U.S. economist at Capital Economics, thinks economic growth fell 0.4 percent in the first quarter.