An economy that had been moving forward at a snail's pace has gone backward.
Economists continue to be optimistic about the future. But their pronouncements seem a bit hollow in the wake of news that the U.S. economy shrank by 2.9 percent on an annualized basis during the first quarter of the year.
The disappointing news means that the U.S. is halfway toward another recession — remember, a recession is defined as two consecutive quarters of negative growth — even before it fully recovered much from the last one in 2008-09.
Since then, the economy has been growing at a frustratingly glacial pace, but at least it's been growing. So last week's news from the U.S. Commerce Department came as somewhat of a shock, even though earlier growth estimates for the period had raised alarm bells.
Analysts attributed the economic setback to weather disruption caused by an extremely cold winter and weak demand abroad. Nonetheless, they continue to put a happy face on future prospects.
Sam Coffin, an economist with USB Securities, said the severe slump is "not really reflective of fundamental" and predicted that "for the second quarter, we'll see some weather rebound and a return to a more normal activity after that long winter."
Economists surveyed by Bloomberg News predict the economy will expand at a 3.5 percent annualized rate during the second quarter and at an annual rate of 3.1 percent for the rest of the year. If those estimates prove to be accurate, the economy will be in recovery mode, although not nearly at the pace of the economic recoveries presided over by Presidents Ronald Reagan and Bill Clinton.
Given its own set of unique problems, the state of Illinois is especially vulnerable to an economic setback. The Illinois economy trails those of its neighboring states in terms of jobs created and additional tax revenues generated, to the point that if Wisconsin or Indiana get a cold, Illinois may catch the flue.
In that context, national economic prospects are especially worrisome. Nonetheless, experts say consumer spending, hiring and business investment are headed in the right direction. If that continues, the first quarter's negative number will represent a scare, but little more.