Japanese economy contracts in first quarter

Japan's economy shrank more than expected in the first quarter. Reuters reports:

Japan's economy shrank in the first quarter at nearly double the pace expected, effectively slipping into recession as the devastating earthquake in March hit business spending and private consumption.

Gross domestic product fell 0.9 percent in the first quarter, much more than a median market forecast for a 0.5 percent contraction.

For the third consecutive quarter, net exports contributed negatively to growth.

Net exports shaved 0.2 percentage point off GDP, against the median estimate that it would trim 0.1 point off growth.

Private consumption, which accounts for about 60 percent of the economy, was down 0.6 percent against the median forecast of a 0.5 percent decline, marking the second straight quarter of decrease.

Corporate capital spending fell 0.9 percent against the market forecast of a 1.2 percent decline.