1. The downward revision was driven primarily by a faster shrinking government sector than originally estimated.
  2. The decline in government spending now essentially matches the rise in personal consumption spending. Thus right now, all of the growth in the economy is coming from business investment.

I think the later point is important because few people seem to be able to internalize that business investment has been quite strong during this recession and indeed right now is the entire recovery, what recovery there is.

That being said, that can only go on for so long. The economy needs durables and residential investment to recover. That means cars and homes. The cars may be looking up and I am still waiting for more homebuilding but they do not seem imminent.