A 3% Contraction In The Economy During A RECOVERY Is Now Referred To As A "Weather-Induced Slump" -- Reuters; 2014 GDP Estimates Now SLASHED -- Reuters

Collapse ... Slashed ... perhaps words one does not like to see in business reports (unless perhaps the slashing has to do with cost cutting). 

Don sent me the link. Reuters is reporting:

The reports were the latest to suggest the economy rebounded in the second quarter after a weather-induced slump earlier in the year. However, another report showing construction spending barely rose in May indicated that second-quarter growth could fall short of expectations.

Economic growth contracted at a 2.9 percent annual pace in the first quarter, also weighed down by a slow pace of inventory accumulation by businesses.

Economists last week slashed their second-quarter growth estimates after weak consumer spending in May. Growth forecasts are now running as high as a 3.5 percent pace and as low as a 2.1 percent rate.

Construction spending edged up 0.1 percent to an annual rate of $956.1 billion, the Commerce Department reported. However, April's data was revised up to show a 0.8 percent rise in construction spending, taking some of the sting out of the report.

A "weather-induced slump"? The economy contracted almost 3% in 1Q14, the worst setback in five years (and one trillion dollars) into this recovery. And now it's described as a "slump"? Earlier Reuters called it a collapse of the economy. But now it's a slump. The business reports are getting as biased as the jobs reports. Both appear to be press releases issued by the White House. One could probably find copies of them on Lois Lerner's hard drive if her hard drive could be found.

I made these comments before I read the article (just saw the headline):

I alluded to this in my meandering musings last night at the blog: Wall Street is doing very, very well.* Main Street not doing well at all. The 800-pound gorilla in the room is ObamaCare, and now with two years of executive orders (his words, not mine) facing us, the uncertainty factor is overwhelming. Folks are waiting to see how the mid-term elections turn out. I assume 2Q14 GDP will be superb based on analysts' comments, but I wouldn't be surprised if 2Q14 GDP fails to impress.

After one of the coldest winters ever that resulted in the collapse of the economy in the first quarter (their words, not mine), one would have expected construction to have taken off like gangbusters this spring. But there it was: up a measly 0.1 percent for the month of May. At best 0.1 percent is a rounding error, not statistically significant, and not reproducible (we will see that when the revised number comes out next month).

By the way, for the record, I don't buy that weather story about being responsible for the contraction. The US has been through much worse -- weather, war, and hand-wringing, and the economy muddled through. Winter in January-February-March does not explain a 3% contraction DURING a recovery.

*Wall Street is doing very well. From Yahoo!Finance, 11:04 a.m. CDT, July 1, 2014:

U.S. stocks have started the third quarter with a bang. The S&P 500 and the Dow industrials are challenging resistance at all-time highs, while the Nasdaq Composite is at its best level since April 2000.