Today's GDP report showed positive growth, by the least little bit possible, 0.1 percent. This is lousy, but it's not awful because some of the bad news is temporary.
The bad weather is part of the story, pushing down discretionary consumer spending (though pushing up spending on heating). Weather also impacted construction activity in much of the country. As I look out my window this morning, it's sunny and warm, so don't expect the weather problems to continue.
Inventories had inflated two quarters ago, and I've been looking for a correction. We had much lower inventory growth last quarter, contributing to the lousy GDP number. There's still room for even more inventory correction, but that should be over in another quarter.
Exports were worse than expected, not that we had been very hopeful here. Whether exports bounce back quickly depends on Europe, both financial issues and military issues, as well as on Asia. There's reason to believe Japan's economy is improving. If China's stops declerating, then future U.S. exports will be decent.
Business Implications: Don't hunker down just yet. This data report is probably worse than your business, and it should get mildly better in the next two quarters. But if your business is really in trouble, the economy probably won't improve enough to bail you out.