The AP reports this morning - - -
The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.
The Commerce Department's report, released Wednesday, dashed hopes that the recession's grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.
Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs. …
The entire AP story’s here.
Many economists are concerned that the record deficits the Obama administration's running up and its plans to increase taxes will slow both the recovery and GDP growth in the out years.
But the AP's story says nothing about those concerns. Instead the AP gives its story an Obama spin that reads like it was written by The White House:
President Barack Obama is counting on his $787 billion stimulus of tax cuts and increased government spending on big public works projects to help bolster economic activity later this year. The administration also has put forward programs to rescue banks and curb home foreclosures - big negative forces weighing on the economy.I think the AP deserves an "A" from WH spokesman Gibbs like the one he recently gave the Obama-fawning White House press corps.
White House spokesman Robert Gibbs called the first-quarter's showing a "pretty severe contraction," but added that some more up-to-date signals on the economy have been more encouraging. "We continue to get, as the president said, some glimmers of hope," he said.
Even in the face of Wednesday's weaker-than-expected report, some analysts stuck to predictions that the economy would shrink less in the current April-June period - at a pace of 1 to 2.5 percent - as Obama's stimulus begins to take hold. Those analysts also continue to hope the economy would start to grow again in the final quarter of this year.