Hey, guess what? The economy really sucks. The GDP dropped 6.1% annually, after plunging more than expected in the past few months. How much more than expected? Well, it’s the worst six month drop since 1957-58.
“This is one of those good-bad numbers,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said in a Bloomberg Television interview. “Businesses are running about as lean as they possibly can be. It sets up the reality that any sort of increase in demand will cause firms to have to increase production.”
Consumer spending has been spurred along by a glut of discounted products, but it seems that inventories are shrinking. If demand stays steady, this would mean that businesses are closer to having to increase production and hire new workers. Cross your fingers, folks.
Economy in U.S. Shrank at 6.1% Rate in First Quarter (Update3) [Bloomberg]
U.S. Economy Contracts Rapidly in First Quarter [Washington Post]