The U.S. economy likely contracted at a much sharper pace in the first quarter than previously estimated with data on Wednesday showing weaker health care spending.

The Commerce Department's quarterly services survey, or QSS, showed health care outlays were not as strong as the government had assumed when it published its second gross domestic product estimate for the first quarter last month.



The government reported that the economy contracted at a 1.0 percent annual rate in the January-March period. But with health care spending data now in hand, economists say growth probably declined at a rate of at least 1.7 percent.



A widening of the nation's trade deficit in March had already led economists to anticipate a downward revision to GDP when the government publishes its third estimate later this month.



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Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania said the latest numbers on services spending "made the first quarter look even worse."

"Health care spending did not add nearly as much to growth as we initially thought in the first quarter," he said.



It is not unusual for the government to make big revisions to GDP numbers as it does not have complete data when it makes its first and second estimates, and the QSS has led to big revisions at times over the last several years.



Even if the economy turns out to have been much weaker than previously thought, there is little cause for concern as many of the factors that held it down in the first quarter were temporary and data ranging from employment to factory and services sector activity indicate it has since rebounded.



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