From Jeff Bater at the Wall Street Journal:
The U.S. economy contracted at a seasonally adjusted 6.1% annual rate in the first quarter despite rising consumer spending, as businesses slashed inventories and expenditures, the Commerce Department said Wednesday.
Economists had expected a 4.6% contraction in GDP.
The 6.1% drop was much bigger than Wall Street expected and hardly different than a 6.3% plunge in the fourth quarter, when the recession that began in December 2007 deepened.
Economists surveyed by Dow Jones Newswires expected a 4.6% drop in GDP during the first three months of 2009.
With a 0.5% drop in the third quarter, GDP has now fallen three consecutive quarters. That hasn't happened in 34 years, since third-quarter 1974 through first-quarter 1975.
Price indicators within Wednesday's report suggested inflationary pressures rose in first-quarter 2009, easing fears of deflation. For instance, the price index for personal consumption expenditures fell by 1.0%, a decline much smaller than the fall of 4.9% in the fourth-quarter 2008. The PCE price gauge excluding food and energy rose 1.5%, after increasing 0.9% in the fourth quarter.