Today’s GDP data showed corporate profits after taxes increased by 12.9% to $1.052 trillion in the first quarter, after plunging by 28.4% in the fourth quarter. GDP fell 5.7% annual rate from January to March this year. It was originally estimated as 6.1% drop. GDP fell 6.3% in the fourth quarter of 2008. It appears that the economy is recovering especially when you consider the improvement in corporate profits.

If the corporate profits continue to climb, it will cure the employment market which will in turn improve the consumer spending. Another good news is that economists this week predicted GDP will fall only 1.8% in the second quarter. The National Association of Business Economics forecasters see GDP growing in the third quarter, rising 0.7%, and project a fourth-quarter increase of 1.8%. If this prediction works out ok, we can finally see the light.

Today’s report also shows that businesses are cutting their inventories. Even simply cutting the inventories is good news in this economic environment. All these data suggests that economy decline is slowing down. Some economists believe that the economy hit the bottom in December 2008. I really hope so.

Related Link: U.S. consumer sentiment highest in 8 months | GDP numbers from BEA

Today the Commerce Department brought some very negative news on the economy. The Commerce Department released a revised fourth quarter Gross Domestic Products number that shows a loss of a stunning 6.2%. Just a few weeks ago the initial estimate was for a loss of 3.8%, and the most shocking part of this revision is the sheer magnitude of the revision. Historically GDP figures aren’t revised by any more than .5% or 1% at the most, but this time it was completely different. The news gets even worse though, this wasn’t even the final reading for the GDP, that will come later on in March.

What caused the large revision downward in the number? Consumer spending dropped 4.3% in the fourth quarter, which is typically a strong quarter because of all the holiday shopping. Also pushing the number lower was a major adjustment lower in exports and inventory investments. To put things in perspective the 6.2% estimate that is currently being shown for the fourth quarter is the worst single quarter since 1982.

The scariest part of the whole thing is that the first quarter is looking much worse than the fourth quarter did. Companies are slashing jobs at a much quicker rate, consumers are slowing down their spending even quicker than they did in the fourth quarter, and the overall sentiment of the market and the economy as a whole has gotten much worse. In order to see a slowdown in the dramatic drops in the GDP of this economy we may need to see slowing of the harsh drop in the housing sector. As of yet, there have been no signs of any kind of improvement in the housing market that could aid the economy.

The truth is we are in a period of great unknowns. The uncertainty is terrible for the stock market and for every individual who wants to have that coveted job security. For the foreseeable future, uncertainty will reign and wise use of savings will be absolutely vital.