CRUMMY GDP NUMBERS.

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The GDP numbers today verged on the obscene: January, February, and March saw a 6.1 percent contraction in gross domestic product. That's the worst reading in since the 1950s, and significantly more dire than than the 4.7 percent predicted by economists. The chart above comes from the fine folks at the Economic Policy Institute and compares the numbers from this recession with the averages from past recessions since World War II. The takeaway is predictable: We're worse off.

Justin Fox, however, sees a silver lining:

In fact, the sharp decline in private inventories that accounted for 2.79 percentage points (almost half) of the GDP decline is actually extremely good news, because it means businesses may have already made most the inventory adjustment that's a part of every recession—clearing the way for an upturn.

To unpack that very quickly, one of the ways recessions end is that companies begin to build their inventory back out. Having stopped production on microwaves because people stopped buying as many microwaves, they begin to sell down their existing inventory. Eventually, they realize they now don't have enough microwaves to meet demand and so they crank the microwave-making-machine back to full capacity. Thus, growth. Or so we hope.

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