RECESSION WATCH

Economic Worst May Be Over

The news that U.S. gross domestic product shrank 6.1 percent last quarter left most economy-watchers feeling pretty glum. But The Wall Street Journal has analyzed the other data in the report, including a modest rise in consumer spending, and reports they are encouraging—and perhaps signal that the worst may be over. Consumer spending rose 2.2 percent in the quarter, and disposable income was up 6.2 percent. Savings are up, as well, which should translate into later spending once consumer confidence is restored. It also looks like the much feared deflation is being held at bay—prices rose at a 2.9 percent annual rate. The stubborn hold-out is business investment, which plunged another 38 percent after tumbling 21.7 percent in last year’s fourth quarter.