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Friday, January 30, 2009

GDP Declines 3.8% in Q4

by Calculated Risk on 1/30/2009 08:31:00 AM

I'll have more a little later ...


From MarketWatch:

U.S. Q4 GDP down 3.8%, inventories limit downturn The U.S. economy contracted at a 3.8% annualized rate in the fourth quarter but the decline would have been worse except that the government counts an unwanted buildup of goods on store shelves as growth.

A clearer picture of the scope of the weakness in the fourth quarter, which excludes the inventory buildup, contracted at a 5.1% pace, the weakest in 28 years.
Consumer spending fell 3.5%, including a 7.1% drop in spending on services, a 3.5% drop in spending on durable goods and a 22.4% decline in spending on nondurable goods, the weakest in 21 years.

Business investment fell 20.1% in the fourth quarter, subtracting 2.3 percentage points from growth. ...

Investments in equipment and software dropped 27.8%, the weakest in 50 years.

Investments in structures fell 19.1%, the largest decline since the first quarter of 1975.

Exports fell 19.7% in the fourth quarter, while imports, which are a subtraction from the calculation of GDP, fell 15.7%. As a result, the narrowing trade deficit added 0.09 percentage points to growth.

Government spending increased 1.9% after rising 5.8% in the third quarter. ...

Businesses added $6.2 billion to their inventories after cutting them by $29.6 billion in the third quarter. The change in inventories added 1.32 percentage points to growth.

Residential investment fell 23.6% in the fourth quarter ...