Economy in Worst Fall Since '82

Output Sank 6.2% Last Quarter; Plunging Trade, Investment Signal Trouble Ahead

The U.S. economy deteriorated far more than previously thought in the fourth quarter, according to new revisions of government data, casting fresh doubt about the chances of a recovery this year.

With falloffs in consumer spending and exports, gross domestic product declined at a 6.2% annual rate in the fourth quarter of 2008, according to a Commerce Department report Friday. The agency's first estimate for GDP, reported in January, was for a 3.8% ... Full Story »

Posted by Fabrice Florin

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Marsha Iverson
3.9
by Marsha Iverson - Mar. 1, 2009

Solid big-picture view of our bleak economic outlook through key indicators, with reference to parallel drops for our major trade partners.

I found this piece interesting and informative, yet it left me wanting more information. I have long been puzzled by the tendency to report economic indicators as unrelated facts: it seems evident that rising unemployment would accompany declining GNP. Similarly, massive layoffs lead me to suspect there will be significant drops in discretionary spending. Of particular puzzlement is the customary inverse relationship between worker displacement and the "value" of securities. In an economic system that is dependent on consumer spending, it cannot come as a surprise that layoffs will cause drops in spending. How can cutting the workforce make values rise in the long term? Overall, economic reporting tends to sound like describing magical rituals that hope to cause positive changes over mysterious, inexplicable, unpredictable economic phenomena. The overwrought partisan political bickering over cause, effect, and possible solutions serves only to deepen the mystery and terrify the natives...in this case, us. We don't know what will work, or how these things relate, but perhaps if we wave our hands just right and chant the right words, the problem will resolve. I crave thoughtful discussion of cause-and-effect economic relationships, and would like to see this story followed up by deeper analyses of these factors.

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