Economy

GDP: The Depression In Recession

The Commerce Department has just reported Q4-2008 GDP this morning, and as expected it was much worse then the original estimates.  The problem is that the “already bad” expectations turned out to be too conservative.  Commerce reported that GDP contracted…

By Douglas A. McIntyre
Published February 27, 2009, 8:40am ET · 1 min read

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The Commerce Department has just reported Q4-2008 GDP this morning, and as expected it was much worse then the original estimates.  The problem is that the “already bad” expectations turned out to be too conservative.  Commerce reported that GDP contracted by a rate of -6.2%.  The original projection a month ago was -3.8%, and estimates for this morning’s report were about -5.3%.

If you include the PCE Price Index, the numbers came in at -6.2% .  Today’s drop is actually the worst since 1982.  The three key component of inventory investment, exports and spending all contributed to the wider drop here.

Inventories were down by $19.9 billion vs. original targets of a rise of $6.2 billion.  Unfortunately, the rest of the revisions were just lower and lower.  The long and short of it is that you don’t have to have an official depression for depression to set in.

Jon C. Ogg
February 27, 2009

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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