The economy was still contracting in the second quarter, but only at an annual rate of 1 percent, which is a huge improvement from the 6.4 percent decline in the previous three months (revised sharply downward from the earlier reading of 5.5 percent). Economists, on average, had expected a 1.5 percent drop. From the NYT:

Now, even with jobs still vanishing and wages flat, many forecasters expect the economy to touch bottom sometime in the next few months. Economists say that businesses from small manufacturers to big automakers are poised to rebuild their depleted inventories, which would spur modest economic growth later this year. "We're going from recession to recovery, but at least early on, it's not going to feel like one," said the chief economist at Moody's Economy.com, Mark Zandi. "For economists, this is a seminal part in the business cycle, but for most Americans, it won't mean much."

That's because the job market is expected to remain horrible even after the recession is over, with double digit unemployment in L.A. likely through much of next year.