Today’s report on last year’s fourth-quarter GDP wasn’t good. In fact, it was quite ugly. But it could have been a lot worse.
Even so, the 3.8% contraction in the economy in 2008’s final three months was the steepest decline since 1982. The previous recession in 2001 never came close to what’s unfolding now. The 1990-91 slump was deeper, but even that will look mild by the time the current downturn has run its course.
In other words, we’re now in the thick of the worst recession since the early 1980s. That said, the crowd was expecting a far deeper loss. The consensus forecast for Q4 GDP was -5.5%, according to Briefing.com. By that standard, the reported 3.8% retreat was a surprise.