Q4 2008

GDP drops 3.8%, Autos 2.04% of that

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GDP statistics were released today and it ain't pretty.

From Bureau of Economic Analysis:

GDP -3.8% 4th Quarter 2008

U.S. exports are way down, imports are also.

Inventory build up reduced the decline of GDP from -5.1% to 3.8%.

Autos was 2.04% of the GDP drop. These means nobody is buying cars and trucks!

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 3.8 percent in the fourth quarter of 2008, (that is, from the third quarter to the fourth quarter), according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent.

5.5% GDP Contraction for Q4, Analysts Predict

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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