Dive Brief:

• Q1 gross domestic product decreased 2.9%, according to the Commerce Department's most recent estimate released Wednesday. That’s a larger drop than a 1% decrease estimated previously.

• Economists say this winter's weather and an unexpected decrease in health care spending, which accounts for some 18% of GDP, contributed to the decrease. The Commerce Department’s Bureau of Economic Analysis initially forecasted a rise in health care spending of 9.9%. That was later revised to 9.1%, but this third report, which takes into account more information and is therefore more accurate, has health care spending falling 1.4%.

• The surprise contraction in the economy may not be as dire as it sounds, leading many economists to forecast more moderate growth than expected for the second half of the year.

Dive Insight:

Markets and many economists shrugged off the surprisingly deep fall in the nation’s gross domestic product when the government's report came out this week. Just when many economists, market observers, and retailers were hoping the economy was finally taking off, these numbers tell a different story.

Most economists, though, believe the poor showing was the result of a dastardly winter in many parts of the country. Plus, this shows that both economists and government analysts alike have yet to figure out the economic effects of the still brand-new Affordable Care Act on what is nearly one-fifth of the nation's GDP.