Economic Decline in Quarter Exceeds Forecast
The American economy is contracting at its steepest pace in 50 years, the government reported Wednesday, but an unanticipated rise in consumer spending since January suggested to many economists that the worst of the recession might have passed.
The last six months were brutal. Output fell at a 6.1 percent annual rate in the January-through-March quarter after falling at a rate of 6.3 percent in last year’s fourth quarter, according to the Commerce Department. If that pace were to continue, nearly $1 trillion would be wiped out this year from the nation’s economic output of $14.2 trillion last year.
Not since 1958, in the wake of a brief but severe collapse in home construction, has the national economy lost so much ground in just six months. But as tax breaks and government stimulus spending kick in, the decline in the gross domestic product could be cut in half by summer.
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