By almost every measure, the first quarter was a washout. And it turns out that instead of growing, it seems the U.S. economy actually shrank. But the business forecast is more about a rebound, not a recession.

Earnings were particularly bad for many high-flying technology companies, with results for the entire market similar to what was last seen at the height of the recession. In fact, previous estimates of Gross Domestic Product (GDP) growth in the one to two percent range are now being revised, with many expecting a contraction of up to half-a-percent.

But if you’re looking at rash of bad earnings reports and other economic data with concern, the contraction may be short-lived. Don't jump to conclusions thinking we may be headed into a new recession, defined as two consecutive quarters of negative growth. Several factors, including a strong dollar, low oil prices, a labor dispute that shuttered West Coast ports, and really bad weather in the Northeast had an outsized effect on the economy.

“From a small business perspective, I would expect if this impacted you at all, the negative print in the first quarter would feel transitory,” said Drew Nordlicht, partner and managing director of Hightower Advisors, San Diego. The firm manages $25 billion in assets for venture capitalists, private equity fund managers, chief executives, and entrepreneurs who have founded companies that went public or received private equity funding.

Nordlicht adds that he expects growth to snap back in the second quarter, and points to similarities with the first quarter of 2014, where GDP shrank by three percent. That contraction was followed by growth of 4.6 percent. Nordlicht said he thinks growth will be between two and three percent in the current second quarter.

Economic Shakedown

Here’s a look at some of the things that drained the economy in the first quarter:

Bad weather: Snowmageddon and an endless parade of lesser storms and frigid weather in the Northeast kept consumers at home and shoveling out, rather than traveling to bricks and mortar stores to spend. Some estimates say the bad weather shaved a point or more from GDP. There’s likely to be pent up demand from consumers that they’ll be ready to unleash this spring and for the rest of the year. So get ready.

The strong dollar: The dollar increased eight percent in the first quarter to $1.20 against the Euro, thanks mostly to weak economies overseas. A more normal currency increase might be in the range of one to two percent over a quarter, Nordlicht says. While the strong dollar has made our exports more expensive relative to the rest of the world, and imports correspondingly cheaper, there’s some evidence the torrid rise in the value of the dollar won’t continue for the rest of the year.

Cheap oil: Sure, that’s meant lower prices for people filling up their cars, but for the people who actually drill the stuff out of the ground, it’s been harder to make a buck. If, for example, it costs $65 a barrel to drill for oil, and the price per barrel falls below $50, you’d be operating a loss. And in big oil producing states, like Texas and North Dakota, and Oklahoma, layoffs in the quarter approached 100,000 as oil producers scaled back.

Housing and construction: Both are the key drivers of economic growth, adding as much as 20 percent annually to GDP. And while the housing market is still growing---for the 12 months ended February, 2015, the Case-Shiller Home Price index rose more 4.2 percent--that’s about a third of the growth seen for the same period a year ago.

Ports shutdown: The Western ports combined, stretching from Los Angeles to Seattle, contributed 12.5 percent of GDP, and a strike or shutdown could cost the economy as much as $2 billion a day, by some estimates.

Some or all of these factors percolated into the earnings of most companies. On an aggregate basis, earnings per share for the S & P index in the first quarter show a decrease of 2.8 percent, and a decrease of 3.5 percent for revenues. Earnings per share have not seen such a dramatic drop since 2009, said Nordlicht.

Tech Sector Swoon

Certainly tech companies from Alibaba to Zynga had bad earnings reports.

Twitter’s losses in the quarter crept up 25 percent to $162 million. Though its revenues grew in the quarter, profit for Alibaba, which had the biggest IPO in history in October, 2014 nose-dived by 49 percent to $463 million.

Alibaba’s stock is down nearly 30 percent from its trading high of $119 a share in November, 2014. Similarly, Twitter’s stock decreased by nearly a third since its October, 2014 high of $55.42.

“After five consecutive quarters of more than 97% year-over-year revenue growth, we underperformed against our expectations,” Twitter chief executive Dick Costolo said on the company’s first quarter earnings call at the end of April. “We anticipate the factors that affected our first quarter results will also affect our 2015 guidance.”

Elon Musk’s Tesla also saw losses widen to $154 million, an increase of more than 200 percent compared to the first quarter of 2014.

And in a more concrete example of how bad earnings affect small companies, gaming company Zynga, of New York, which actually saw its losses decrease by 25 percent to $47 million, announced it would be laying off 18 percent of its workforce, or about 364 people. Mark Pincus, Zynga's chief executive, said the layoffs would help narrow the focus of the company, according to the New York Times on Wednesday.

The negative earnings weren’t limited to Silicon Valley and once high-flying tech stocks, either. Market stalwarts such as Coca Cola, McDonald’s and Caterpillar all experienced decreasing revenues or profits.

In fact, the economy was so anemic in the first quarter that the Federal Reserve Board, famous for the opacity of its statements, essentially said last Wednesday that it would put off an interest rate hike for the foreseeable future. Here's what the Board of Governors had to say in a written statement:

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate… The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run. 

Startup Optimism

But it wasn’t a bad quarter for everyone, particularly some startups. Despite the port closures, which kept some of Mike Del Ponte’s new packaging material stuck on ships for months, practically outside his window, the chief executive of Soma, a sustainable water filter and carafe company in San Francisco, said his quarterly growth rate beat expectations.

Soma is an ecommerce company, so even snow-bound Northeasterners may have been able to buy his product during the blizzards, Del Ponte speculated. Soma, which launched in 2012 and which has eight employees, is private and does not release its revenue numbers, but it beat its own sales forecast for the quarter by 20 percent, and year over year revenues for the quarter increased 14 percent Del Ponte said.

Still, Del Ponte had to order duplicate packaging material from a domestic vendor while he waited out the strike, which added to his costs.

“It was more of an inconvenience, and it won’t hurt us in the long run,” Del Ponte said.