No one expected good news, and the expectations were met.
Today’s update on 2008’s fourth-quarter GDP was ugly, the ugliest in 25 years, in fact. The economy contracted by 6.2% at a real, annualized seasonally adjusted pace in the last three months of 2008. That’s much deeper than the 3.8% decline originally estimated by the government.
Painful, but no one should be shocked, given the general economic and financial climate. But let’s be clear: the embedded message in today’s revised numbers from the Bureau of Economic Analysis is sobering. The principal reason it’s sobering is that the main driver of economic activity has stumbled and the prospect for a quick turnaround is about as likely as waking up on the surface of Neptune tomorrow.