America's great recession eased somewhat in the first quarter of this year compared with the previous three months, new data shows, another signal that businesses and consumers may have put the worst of the contraction behind them.
Gross domestic product (GDP) – the measure of US output of goods and services – shrank at an annual revised rate of 5.7 percent in the first quarter compared with 6.3 percent in the fourth quarter, the Commerce Department reported Friday. The department had originally estimated a 6.1 percent annual-rate decline in GDP for the first three months of 2009.
The main drivers behind the revised number were higher private nonfarm inventory investments and a less sharp decline in exports. A closely watched indicator of consumer spending – personal consumption expenditures – was not as strong, however. It rose only 1.5 percent versus 2.2 percent estimated a month ago.
Corporate profits from current production rose $42.6 billion during the quarter after falling $250.3 billion during the fourth quarter of 2008. The improved corporate picture was driven primarily by financial corporations, which earned $116.1 billion during the quarter, after losing $178.7 billion in the fourth quarter. Nonfinancial corporations suffered a $64.2 billion loss, although that was somewhat better than the previous quarter.