Wednesday, April 29, 2009

BREAKING: Economy still terrible

Ugh.
The gross domestic product shrank at an annual rate of 6.1 percent from January through March, the Bureau of Economic Analysis reported. It was the third straight quarter of declines and capped the worst six months of economic activity since the late 1950’s.

Economists had predicted a drop of 4.7 percent, and the steep dip could dampen hopes that the pace of economic declines had begun to ebb. The decline was almost as sharp as in the previous quarter, when the economy shrank at a pace of 6.3 percent, its worst drop in a generation.

Though this might not be as bad as it seems, according Justin Fox, as these numbers are necessarily backward looking... and we already knew the last few months have been terrible, so it's not giving us much in the way of new information to help determine whether there is any light at the end of the tunnel.

The silver lining is that almost half of the decline was due to companies reducing inventory, which may mean that companies have adjusted for the downturn and are poised for a rebound. Maybe.