- By Annie LowreyAnnie Lowrey is assistant editor at FP.
Again, very, very bad news for the U.S. economy: after contracting at a 6.3 percent annual rate in the final quarter of 2008, it contracted at a 6.1 percent rate in the first quarter of 2009.
That means the economy shrank 2.6 percent compared with last year’s first quarter. It’s a point-and-a-half higher annualized rate than economists predicted.
What’s most worrisome is that the recession isn’t easing at all, yet — there’s no real bottom there. We aren’t close to talking about the economy growing again. We’re still waiting for it to shrink less quickly.
The only green shoots: economists believe that inventory and production are so anemic that any rise in demand will force businesses to grow — that would be a good thing. And consumer spending rose 2.2 percent.
One question. The Wall Street Journal reports, "Federal government spending decreased 4.0%, after rising in the fourth quarter by 7.0%. State and local government outlays fell 3.9%, after going down by 2.0% in the fourth quarter."
Even with cuts in military spending, shouldn’t that number go up?