In last week’s Weekly Economic Commentary, we wrote that while the "front-end" of the U.S. economy – consumer spending – which accounts for two-thirds of real gross domestic product (GDP), had stabilized thus far in the first quarter of 2009 relative to Q4; while the "back end" of the U.S. economy – business spending on plant, equipment and inventories – was decelerating to the downside. We also noted that because the "back end" of the economy was still in free fall, the risk was rising that a massive inventory drawdown in Q1 could make the decline in Q1 real GDP worse than the 6.2% drop in real GDP recorded in Q4.

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