The government lowered its estimate of 1st quarter GDP growth:

The government lowered its estimate of how much the economy grew in the first quarter of the year, noting that consumers spent less than it previously thought.Gross domestic product rose by an annual rate of 2.7 percent in the January-to-March period, the Commerce Department said Friday. That was less than the 3 percent estimate for the quarter that the government released last month. It was also much slower than the 5.6 percent pace in the previous quarter.

[. . . Going forward . . .] inventory restocking will provide less of a boost to GDP. Another factor inhibiting growth will be a reduction in government spending. The impact of the federal stimulus program is expected to fade toward the end of the year. Economists also warn that state and local governments are likely to rein in spending and raise taxes as they struggle to close budget gaps. That was apparent in the latest GDP estimate, which showed state and local governments reducing their outlays by about 4 percent.

Will we have a second dip? Krugman thinks we will have a lost decade: