In the first quarter of 2014, the government sent shivers through global financial markets by reporting a recession-like contraction in the U.S. economy of 2.1 percent. Despite severe winter storms and record-breaking cold, economists still could not account for the deep plunge in growth. Even Federal Reserve officials worried something worse than just the effects of bad weather could be amiss in the economy.
Turns out, it was the data itself and how the government calculates gross domestic product that were actually amiss. The Bureau of Economic Analysis, the federal agency responsible for GDP, now says growth was actually 1.2 percentage points higher in the quarter for a more manageable and understandable decline of 0.9 percent.
The bureau announced Thursday its regular annual revisions of the past three years and confirmed a series of stories in CNBC that raised questions about the seasonal pattern of growth. Overall, the government revised down GDP over the three years ending in 2014 by a modest 0.3 percent but also took the first steps in changing the way it calculates GDP to account for anomalies in the quarterly pattern of growth.
Read MoreFirst reading on Q2 US GDP at 2.3%
From 2012 to 2014 growth actually averaged 2.1 percent, compared with the originally reported 2.4 percent. The bulk of the downward revision came in 2013, where GDP is now reported to have increased a meager 1.5 percent, down 0.7 from the prior level. The years 2012 and 2014 barely budged.