Christina Romer, chairman of President Obama’s Council of Economic advisers, was cautiously optimistic on CNBC about the better than expected GDP numbers, which showed the economy shrank at at 1 percent rate last quarter. “It is still minus, but less minus,” she said.
Romer said that without the stimulus package, the economy would have shrank 2 or 3 percent instead, and insisted the numbers showed the economy was on “the right trajectory,” and would begin to show growth in the second half of the year.
At the same time, she noted that the fact that economy still shrank implied that next week’s unemployment report would show another few hundred thousand job losses.
Though the economy contracted at a slower pace, consumer spending was worse than expected, suggesting to economists a sluggish recovery.
The stock market has had a mixed reaction in early trading, fluctuating between slightly positive and slightly negative territory.