From NYT:
The economy contracted sharply in the first quarter of the year as businesses scaled back on investments and cut their stockpiles of unsold goods, the government reported on Wednesday. But the numbers suggested that the worst of the recession may be fading as the government’s stimulus filters into the economy.
The gross domestic product shrank at an annual rate of 6.1 percent from January through March after a 6.3 percent decline in the fourth quarter of 2008. Not since 1958 have Americans experienced such a sharp contraction over six months.
But on Wall Street, investors barely flinched at the worse-than-expected decline in economic output. Stock markets rallied 2 percent in midday trading as two big media and entertainment companies beat earnings expectations and analysts upgraded their outlook on bank profits.
Although economists expect the economy to shrink again in the current quarter, they said it would do so at a slower pace and level off in the second half of the year as one of the longest downturns since the 1930’s begins to lift.
“The 6.1 percent decline in the first quarter was very bad,” said Mark Zandi, chief economist at Moody’s Economy.com. “But the situation is not nearly as dark as this number suggests. The details suggest a more stable economy this summer.”