US Economy Shrank 6.2% last quarter

setmefree2

The revision of the GDP fall in the 4th Qtr has come in at a shocking 6.2% :eek:. You may remember that the initial figure was 3.8%. This is the worst figure since 1982.

"The U.S. economy shrank in the fourth quarter at a faster pace than previously estimated as consumer spending plunged, companies cut inventories and exports sank. Gross domestic product contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according to revised figures from the Commerce Department today in Washington. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades"


http://www.bloomberg.com/apps/news?pid=20601087&sid=arvmEfnEL1OI&refer=home

ad9898_3

That's a serious drop, and to think Darling said that UK growth would be positive by the end of the year, it's obviously not going to be, so his 1% on NI in 2011 is going to turn into 5p on income tax, add a penny a month as borrowing goes through the stratosphere.:rolleyes:

setmefree2

In 2008 as a whole, the US economy grew by 1.1%, which is the slowest pace since 2001. It fell off a cliff in the 4th qtr. More news here

http://news.bbc.co.uk/1/hi/business/7915040.stm

setmefree2

The DOW looks like it might go through the 7000 mark this afternoon. Unbelievable.

Cannon_Fodder

With the stimulus package agreed only last week, which one has to assume they would not waste if they were anywhere near turning the corner, it seems highly unlikely that the US GDP will stop falling in this or the next quarter.

Officially in recession since October 2007 I saw on BBC News, so what will the total recession GDP drop be ?

and how will it compare to pre-80s...?


EDIT; seeing setmefree2's post on BBC article re 1.1% growth in 2008 - now I'm confused, I was watching TV and I swear it said October 2007 - maybe it was October 2008 since "official" recession. I'm sure I'd already seen a piece weeks ago about April being the start of US recession?

Hey ho. More stats confusion.

setmefree2

Cannon_Fodder wrote: »

With the stimulus package agreed only last week, which one has to assume they would not waste if they were anywhere near turning the corner, it seems highly unlikely that the US GDP will stop falling in this or the next quarter.

Officially in recession since October 2007 I saw on BBC News, so what will the total recession GDP drop be ?

and how will it compare to pre-80s...?

Agree - most analysts seem to think it will be a couple of quarters or more until the stimulus package kicks in:o.

setmefree2

Cannon_Fodder wrote: »

With the stimulus package agreed only last week, which one has to assume they would not waste if they were anywhere near turning the corner, it seems highly unlikely that the US GDP will stop falling in this or the next quarter.

Officially in recession since October 2007 I saw on BBC News, so what will the total recession GDP drop be ?

and how will it compare to pre-80s...?


EDIT; seeing setmefree2's post on BBC article re 1.1% growth in 2008 - now I'm confused, I was watching TV and I swear it said October 2007 - maybe it was October 2008 since "official" recession. I'm sure I'd already seen a piece weeks ago about April being the start of US recession?

Hey ho. More stats confusion.

US recession officially started in December 2007. Technically a recession is two falls in GDP but the US let the The National Bureau of Economic Research decide when the recssion starts. They decided Dec 2007 - so this is the start of the official recession in US.

EDIT

Bloomberg said "For all of 2008, the economy expanded 1.1 percent"

Cannon_Fodder

setmefree2 wrote: »

US recession officially started in December 2007. Technically a recession is two falls in GDP but the US let the The National Bureau of Economic Research decide when the recssion starts. They decided Dec 2007 - so this is the start of the official recession in US.

EDIT

Q1 +1.0
Q2 +2.8
Q3 -0.5
Q4 -6.2

Ummm I make that -2.9. Don't know where BBC got +1.1 from?

ok, so US doesn't help by counting positives quarters as still being in a recession, so that's confusion 1...

but like you say the maths doesn't seem to add up for the total 2008 GDP effect...confusion 2.


Aha! - http://news.bbc.co.uk/1/hi/business/7759470.stm


" The NBER uses key monthly indicators of economic output, including employment, industrial production, real personal income, and wholesale and retail sales - to determine when economic growth has turned negative, rather than relying solely on two quarterly declines in GDP.
It defines a recession as a "significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators." "

Awkward yanks.

Graham_Devon

Considering Brown keeps talling us this started in America, and were following America, and this is Global, I think we can pretty much expect figures like these ourselves in 9-12 months time.

Were roughly a year behind America in this cycle, and have so far, watched the US house crash, the US bank crashes etc.

Only for our houses to crash, and now look at our banks.

Remember the whole Lehmans stuff in America? Wasn't NR still going then on it's own? Wasn't Gordon saying then we are in a better position to weather the storm?

Well now look at NR and RBS, look at house prices, were following, theres no denying it.

StevieJ

Graham_Devon wrote: »

Considering Brown keeps talling us this started in America, and were following America, and this is Global, I think we can pretty much expect figures like these ourselves in 9-12 months time.

Were roughly a year behind America in this cycle, and have so far, watched the US house crash, the US bank crashes etc.

Only for our houses to crash, and now look at our banks.

Remember the whole Lehmans stuff in America? Wasn't NR still going then on it's own? Wasn't Gordon saying then we are in a better position to weather the storm?

Well now look at NR and RBS, look at house prices, were following, theres no denying it.

Lehmans went Sept 08, Northern Rock was a year earlier

Wasn't Gordon saying then we are in a better position to weather the storm?
An economist from some hedge fund or other said exactly that on Radio 5 a couple of hours ago/

MrDT

Graham_Devon wrote: »

Remember the whole Lehmans stuff in America? Wasn't NR still going then on it's own? Wasn't Gordon saying then we are in a better position to weather the storm?

Nah, crock was nationalised way before Lehmans went under. Bear Stearns was just after the crock too I think. We lead and others follow