Consumer spending slowed dramatically, to its lowest rate of growth in recent history. Business spending slowed even more dramatically, from a growth rate in the neighborhood of 8-10% over the past 10 quarters to just 3% this quarter – the lowest rate of business spending growth since 2003: Q1.
In fact, the only thing that kept GDP growth positive at all was a massive build-up in inventories – the largest increase in inventories since early 2002. Apparently businesses were caught off guard by the slowdown in demand, and have not yet slowed their production accordingly. Presumably, they will.
With news like this, it begs the question of whether the stock market will hold up, and whether unemployment will rise. Better not buy that big new house yet. In six months there might be some real bargains on the market.