US economy contracts 1.6% in first quarter amid record trade deficit

The US economy grew at a robust 6.9% pace in the fourth quarter

The US economy contracted in the first quarter amid a record trade deficit, the government confirmed on Wednesday, but that picture is misleading as domestic demand was strong.

Gross domestic product fell at a 1.6% annualized rate last quarter, the government said in its third GDP estimate. That was revised down from the 1.5% pace of decline reported last month.

The economy grew at a robust 6.9% pace in the fourth quarter.

Economists polled by Reuters had forecast the pace of contraction would be unrevised at a 1.5% rate.

The decline in GDP last quarter also reflected a slower pace