While today’s downward revision was widely expected, the market was actually anticipating worse news.
The immediate reaction suggests an attitude shifting from the glass half empty to half full. The bigger picture issue remains unchanged: there is simply not enough water in the glass to quench our thirst.
The timing of this slowdown is comparable to recent recoveries; what is different is the relative depth of this recession, and the relative mediocrity of the recovery.
The potential for a V-shaped recovery is increasingly looking like a mirage as the impact of the massive stimulus dries up.
One could argue that the stimulus was successful in its most immediate goal which was to pull the economy back from the precipice, but the economy continues to struggle to find another robust source of growth in the aftermath.
This result will only put more weight on the back of consumers who are already grappling with high unemployment, diminished balance sheets, and an unusually uncertain outlook for the economy.