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E&P investment plunge of 48.6% annual rate is steepest since 2009

The government’s revised estimate for first quarter growth was revised down to -0.7% growth from 0.2% growth. The U.S. economy shrank in the first three months of the year due to severe winter weather and a widening trade deficit, reports the Associated Press.

Harsh winter weather kept consumers home and closed business, reports the AP, while labor disputes slowed trade at West Coast ports. Imports to the U.S. outweighed exports, further dragging down the economy. Housing construction and business investment in equipment were both revised up.

Cuts in energy exploration and production hit the economy hard. The government said E&P investment plunged at an annual rate of 48.6%, the steepest drop since 2009, during the Great Recession.

Growth expected through the rest of the year

Though falling GDP can be a sign of recession, economist see little cause for such concern this year. Steady job gains are expected to fuel modestly healthy growth for the rest of 2015. Analysts generally foresee the economy, as measured by the gross domestic product, growing at an annual rate of 2% to 2.5% in the second quarter, with further strengthening later in the year.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.