Last month, when the Bureau of Economic Analysis announced that gross domestic product had grown at a lead-footed rate of 0.1 percent in the first quarter, economic analysts could focus on two pillars of hope. The first was that the winter weather was unusually awful, and first-quarter growth probably reflected that. And the second? This was a very preliminary number, and it seemed reasonable to think that it might be revised upward.
The operative word is “seemed.” Now the BEA has provided its first revision, and things only get more dismal: The economy actually contracted in the first quarter instead of just lying down on the sofa and feeling all mopey and sad. Key areas of decline were exports, inventories and nonresidential fixed investment. In other words, whatever happened was happening on the business side. [Read more...]