Top of the News: The economic outlook continues to be a mirror of the biases the looker brings. So it is with today’s report that the economy shrank 6.1 percent in the first quarter, much worse than expected and little better than the 6.3 percent rate of 2008’s last quarter.
The searchers for green shoots can say, well, it’s a little less worse than 4Q 2008. And consumer spending revived a bit. Meanwhile, consumer confidence has picked up (of-so-very) slightly from abysmal lows. And some housing inventory is being absorbed.
Bears can point to the continuing speed, depth and wide-ranging damage of the downturn — running in synch around the world.
For example, housing has not reached bottom, much less seen a revival in construction. Meanwhile, areas such as credit-card debt, commercial construction and poor-quality corporate debt are shoes waiting to fall. Trade was down — not good for Washington state. And no turnaround can come until massive job losses ease.
Bears win this argument, whatever Wall Street game is going on today. (I suspect some of it is relief that the flu isn’t worse, although damage to the tourism and airline industries hasn’t yet been tallied; also Caterpillar seemed to indicate some green shoots in Chinese demand). Stand by for the Fed’s interest-rate meeting to end and make an announcement around 11:15 Pacific time.
Today’s Econ Haiku:
Now I can stand tall
In the 737
Now for wider seats…