The U.S. Commerce Department reports in its first estimate of economic performance for the January to March quarter, that the U.S. economy contracted at a bigger than forecasted annual rate - 6.1 percent.
This is the second 3 months period in which the economy shrank at a more than a 6 percent annual rate. The rate of decline was more than financial markets had expected. But despite that, stock prices rallied Wednesday as analysts found positive elements to the otherwise grim report. These included a slight increase in consumer spending and a replenishment of business inventories.
Christina Romer is President Barack Obama's chief economist.
"I'm kind of sticking with what the private forecasters are telling me. I think there is still shrinking in the second quarter, we're absolutely going to see another fall. But it should be a fair amount smaller. And then, I think most people are now saying we may bottom out, certainly in the second half of the year, maybe in the third quarter - and then by the end of the year, seeing positive growth again."
Romer spoke on Bloomberg Television, which also interviewed Michael Moran, Chief Economist at Daiwa Securities in New York.
"Consumers are going to have to take some time to repair their damaged balance sheets. With the housing prices down and the equity market well down, the household sector has lost a great deal of net worth. And I think you have to rebuild that."
Moran says the economy will expand at a more than 2 percent rate during the second half of the year.
The International Monetary Fund last week forecast that the U.S. economy would contract by 2.8 percent this year, after expanding by about one percent last year. The U.S. recession, which began in December 2007, is the most severe since the Second World War.
In an effort to pull the economy out of recession, the Obama administration has won Congressional support for large increases in government spending to compensate for sagging consumer demand. In addition, the Federal Reserve - the nation's central bank - has lowered short-term interest rates to near zero percent and pumped huge amounts of money into the economy.
rally: (of securities) to rise sharply in price after a drop（跌停回升）
bottom out：to reach the lowest state or level（探底，降至最低点）