First the bad news: The U.S. economy contracted for the fourth consecutive quarter, the first time that's happened, says Calculated Risk, since the government started keeping quarterly records in 1947.
Now the good news. The Commerce Department's initial stab at figuring out the gross domestic product (GDP) for the second quarter of 2009, came out at a 1 percent decline, which is lower than economists were predicting and much lower than the 6.4 percent decline registered in the first quarter or 5.4 percent in the fourth quarter of 2008.
The GDP estimate will get revised several times in upcoming months, and I'll take a closer look at the statistics later today in an attempt to unpack their real significance, but for now, it's worth comparing this number, as Calculated Risk does, to what the Obama administration predicted might happen when it was cooking up its stress tests for banks.
For the stress tests, the baseline scenario for Q2 was minus 1.2 percent, and the more adverse scenario was minus 4.3 percent, so, before revisions, Q2 is tracking close to the baseline scenario.
The Obama administration has come under heavy fire from both left and right for the fact that unemployment numbers have been far worse than the baseline scenario and have even been outpacing the adverse scenario. But as regards the larger picture, the forecast seems pretty dead on. And remember, the true impact of the stimulus isn't supposed to start kicking in until the current quarter.
If the recession isn't over, it will be soon. The question now is what next?