Q3 GDP Gets Worse …. Again

Posted by Jason | Posted in Economics | Posted on 29-12-2009


Thanks to The Business Insider blog for this one. Looks like GDP is getting closer and closer to no growth in the 3rd quarter. Considering how much of the 3.8% growth that was originally estimated was cash for clunkers and other government voodoo, it looks like we actually probably had real negative growth.

Last week the Commerce Department announced that in Q3 GDP had been revised down to 2.2% growth after first clocking in at a brisk 3.8%. The number was the latest blow to those who are still holding out hopes of a V-shaped recovery.

Not only was the headline number disappointing, but a deeper drill-down is also depressing. As Goldman Sachs analyst Jan Hatzius pointed out in a recent note, major GDP components, including consumption, residential investment, and business investment decline in lockstop. There were no outliers distorting the number.

Quite simply, across the board, things aren't as good aswe thought… or hoped.

via CHART OF THE DAY: That Horrible Q3 GDP Report Was Even Worse Than You Thought.

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Comments (2)

That goes along with what I have been hearing about a sharp correction after the first of the year.

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Lee, I’ve been reading about the same correction. The Fed is eventually going to have to raise interest rates to head off inflation, so it’s not hard to imagine a major contraction. This is what happens with central management. If we’d let the market set interest rates, you wouldn’t have had the housing bubble, and you wouldn’t have the inflation we’ll probably get.

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