GDP Contraction Worse Than Thought

Fox Biz reports the final reading on 1st-Q GDP came in worse than expected “raising fresh concerns” about the likelihood as well as timing of a US recession “that already may be in progress.”

The Commerce Dept’s final “revision” of first-quarter gross domestic product released on Wednesday, economists say, confirmed a larger contraction of the US economy that initial published numbers, thereby “supporting the view that a recession is either in progress or coming. Meanwhile, sitting at an eye-popping 8.6% is “weighing on consumer” confidence (another bad omen) while the gyrating stock market is headed “for the worst first half of a year since 1970.”

The revised GDP numbers, from 1.4% to 1.6%, may not sound like much, but recall the 1.4% mark was itself worse than originally forecast by many pundits and economists. Now, they widely concede, some slowdown in the economy may be inevitable as the Federal Reserve Board “continues to bump up interest rates to cool inflation (the next decision to be made in late July) “and will be looking for [more] indications of whether a full-fledged recession – defined by two consecutive quarters of contractions – is brewing.

Davd Soul