Friday, January 30, 2009

GDP Down 3.8%... Beats Estimates

Marketwatch reports:

The U.S. economy contracted at a 3.8% seasonally adjusted annual rate in the fourth quarter, the Commerce Department estimated Friday. This is the largest contraction since the first quarter of 1982. Economists surveyed by MarketWatch were expecting a negative 5.5% growth rate in the fourth quarter.

The weakness in the fourth quarter was masked by a buildup in inventories, which adds to output even if they are unwanted. Real final sales for domestic product, which excludes inventories, decreased 5.1% in the fourth quarter. This is the biggest drop since 1980.

Breakout of the Components

Contribution of the Components

Nominal GDP Crushed (the problem here is debt is nominal)

Source: BEA

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