GDP number suggests inventory bottom

By Geert De Lombaerde Posted on April 29, 2009 at 8:22 am

The headline first-quarter GDP number looks bad, but companies’ push to slash inventories may mean a manufacturing bounce later in the year.

Companies trimmed stockpiles at a $103.7 billion annual rate last quarter, the biggest drop since records began in 1947. Excluding the reduction, the economy would have contracted at a 3.4 percent pace.

“This is the combination you want for a turn in the economy — better sales and an inventory correction,” John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said before the report.

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Tags: economic indicators, economy, gross domestic product, manufacturing  

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