The U.S. economy experienced its most violent contraction in a generation during the fourth quarter, with real gross domestic product plunging at a 6.3% annualized seasonally adjusted rate, the Commerce Department reported Thursday in its third estimate of quarterly growth.
GDP hadn't fallen so much since the first quarter of 1982. It was the third largest decline in GDP in 50 years.
Economists believe the current quarter, which ends March 31, was nearly as bad.
Current projections look for GDP to fall at a 5.1% annual pace. Since 1947, GDP has never fallen by more than 4% for two quarters in a row.
Some have a more extreme view: "The economy will contract by a staggering 7% to 8% in the first quarter, before the economy begins to stabilize,"wrote Nariman Behravesh, chief economist for IHS Global Insight.
GDP is expected to fall 2% in the second quarter, according to a suvey of economists conducted by MarketWatch.
Thursday, March 26, 2009
GDP Contracts by 6.3%