5.5% GDP Contraction for Q4, Analysts Predict

The actual numbers from the Commerce Department are not out until January 30th. Yet both Bloomberg and Marketwatch are reporting a 5.5% annual rate drop in GDP for Q4.

Gross domestic product contracted at a 5.5 percent annual rate from October through December, the biggest drop since 1982, according to the median estimate in a Bloomberg News survey ahead of Commerce Department figures due Jan. 30.

Real economic activity fell off a cliff during the fourth quarter, producing a sharp drop in employment, output and spending," wrote economists at Wachovia.
And the worst part is that it's not over. Economists expect another huge decline in the first quarter, with a smaller contraction in the second quarter

Revised GDP, Decline to 0.5%

GDP has been revised downward to 0.5% for Q3, 2008. From the BEA:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.5 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent.

Looks like they are still blaming Hurricane Ike. The details on what were the contributing factors is in the link. One thing to note is this includes government spending increases.

Noted is this is the fastest rate of GDP decline in 28 years.

Housing prices declined a whopping 17.5% from one year ago.

Economy Contracts

As expected, GDP falls 0.3% in the 3rd quarter, but that's a little better than what was forecast, a 0.5% contraction.

GDP has risen 0.8% in the past year.
Economists expect the economy to contract in the final three months of this year and the first three months of 2009, with the nation's unemployment rate pegged to rise near the 8% mark. It would be the longest contraction since 1975.

What is more subtle, the focus is on consumer confidence and spending, in the headlines and analysts. Once again, not on production, which is on life-support.

GDP Exceeds Estimates - But Wait, Some Economists calling it the Last Hurrah

Just when you think the respite is upon us, the U.S. Chamber of Commerce says:

Today's GDP report is kind of the last hurrah for the U.S. economy, said at a press conference today. ``We've begun the process of slipping into a good old-fashioned recession -- Martin Regalia, chief economist for the U.S. Chamber of Commerce

We're in a Recession - Unemployment, GDP

Well, finally someone admits something we all know, we're in a recession:

We're in a recession,'' Allen Sinai, chief economist at Decision Economics Inc. in New York, said in a Bloomberg Television interview. ``It's going to widen, it's going to deepen.

GDP - 1.9% vs. 2.3% expected.

Trade deficit narrowed, lowest in 7 years.

American Economic Alert goes into depth on the unemployment rate statistics:

six months, the economy lost 438,000 jobs. Manufacturing and construction shed 235,000 and 261,000 jobs, respectively, and in recent months, layoffs spread to finance and retail sales. If the economy is to pick up in the second half, the Friday jobs report will have to confound forecasters, who are generally pessimistic