The U.S. economy contracted at a negative 1.5% annual rate in the first quarter instead of the initial estimate of negative 1.4%, revised government data released Thursday show. Forecasters surveyed by the Wall Street Journal had expected a slight upward revision to a negative 1.3% reading. Economists believe the contraction overstates the slowing economy. Most of the weakness stemmed from the record trade deficit as consumers opened their wallets and bought foreign goods. In fact, consumer spending was revised higher in the first quarter, to a 3.1% rate up from the prior estimate of a 2.7% increase. The downward revision to GDP was led by weaker inventory and household investment. Looking ahead, economists at IHS forecast the economy will grow at a 2% annual rate in the second quarter. In one piece of new data, corporate profits fell at a 2.3% rate in the first quarter after a 0.7% gain in the prior three months. This is the first decline in five quarters. On a year-on-year basis, corporate profits are up 12.5%.
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