White House shrugs off economic contraction

The White House on Friday downplayed the economic contraction reported for 2015’s first quarter, saying other indicators show the recovery is still on track.

Council of Economic Advisers Chairman Jason Furman noted that personal consumption and fixed investment have grown 3.4 percent over the past four quarters, brushing aside the weak gross domestic product (GDP) report.

{mosads}“This solid long-term economic trend complements the robust pace of job growth and unemployment reduction over the last year,” Furman wrote in a blog post.

The Commerce Department on Friday projected the nation’s GDP shrank by 0.7 percent in the first three months of 2015, a significant slowdown from the last half of 2014. The agency’s initial estimate said the economy grew by 0.2 percent in the first quarter.

Furman wrote the revision was accounted for by low inventory investments and net exports, and he blamed the slowdown on “harsh winter weather, tepid foreign demand, and consumers saving the windfall from lower oil prices.”

Furman says tepid growth shows the need for Congress to pass President Obama’s trade agenda, make new infrastructure investments, and lift federal spending caps put in place by sequestration.