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Title: Recession in U.S. Was Even Worse Than Estimated, Revisions Show
Source:
Bloomberg
URL Source: http://www.bloomberg.com/news/2010- ... ed-revisions-to-data-show.html
Published: Jul 30, 2010
Author: Bloomberg
Post Date: 2010-07-30 09:05:40 by go65
Keywords: None
Views: 55813
Comments: 96
The worst U.S. recession since the 1930s was even deeper than previously estimated, reflecting bigger slumps in consumer spending and housing, according to revised figures. The world’s largest economy shrank 4.1 percent from the fourth quarter of 2007 to the second quarter of 2009, compared with the 3.7 percent drop previously on the books, the Commerce Department said today in Washington. Household spending fell 1.2 percent in 2009, twice as much as previously projected and the biggest decline since 1942. “We do tend to get bigger revisions at turning points in the economy,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press conference this week. On the more positive side, “in the past, we’ve tended to undershoot the recovery” as well, he said. The data better explain why the jobless rate doubled, reaching a 26-year high of 10.1 percent in October, and has been slow to subside. The government also boosted personal income levels for each of the past three years, propelling the savings rate higher and signaling households are further along the process of repairing finances. The rebound from the recession has been more subdued in the last six months of 2009, as the economy grew at an average 3.3 annual pace from July 2009 through December, instead of the 3.9 percent previously projected. Lehman Collapse The worst quarter of the current economic slump is now the final three months of 2008, in the immediate aftermath of the collapse of Lehman Brothers Holdings Inc., rather than the first quarter of 2009. GDP shrank at a 6.8 percent pace from October to December 2008, exceeding the prior estimate of 5.4 percent, making it the deepest quarterly drop since 1980. The new data showed the peak of the last expansion occurred in the fourth quarter of 2007 rather than the second quarter of 2008. The figures are more in sync with the recession chronology prescribed by the National Bureau of Economic Research, the accepted arbiter of U.S. business cycles. The Cambridge, Massachusetts-based private group determined the slump began in December 2007, and has yet to announce when it ended. Consumer purchases, which account for 70 percent of the economy, were cut for each of the past three years, with the biggest reduction taking place last year. Less spending on services than previously estimated, including financial services and auto repair, was responsible for the change. Services Revised Data on services, which make up almost 90 percent of the economy, are less timely than figures on manufacturing and are therefore subject to larger revisions, the BEA’s Landefeld said in the press conference. Efforts are under way that will make it possible for the government to measure consumer spending at almost all service industries by 2013, said Landefeld. Starting this year, coverage will improve to about 39 percent from 19 percent in prior years. Personal income was revised up by $18.2 billion in 2007, by $152.3 billion in 2008, and by $155.9 billion last year, the report showed. Part of the reason for the improvement was that corporate dividends didn’t plunge as much as previously estimated. Disposable income, or the money left over after taxes, grew 1.5 percent a year on average during from 2007 through 2009, compared with a prior projection of 1.2 percent. More Savings Higher incomes and less spending meant bigger savings as a proportion of disposable income, the revisions showed. The savings rate reached 7.2 percent in the second quarter of 2009, the highest since 1992. Residential construction fell at a 22 percent annual pace during the 2007-2009 period, one percentage point more than previously reported for what was already the worst housing slump since the Great Depression. The government revised pre-tax corporate profits down for each of the three years. The biggest change was a $97.6 billion reduction, or 7.2 percent cut, in 2008. The drop was mainly among financial institutions, indicating the financial crisis was more severe than previously estimated. Price measures including the Federal Reserve’s preferred inflation gauge -- which tracks consumer spending and excludes food and fuel -- were little changed during the 2007 to 2009 timeframe, the new figures showed. The revisions are part of the government’s annual updates derived from broader, more complete, surveys. The Commerce Department also reported today that the economy grew at a 2.4 percent annual rate from April through June following a 3.7 percent pace of expansion in the first quarter that was previously reported as a 2.7 percent gain.
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Begin Trace Mode for Comment # 59.
#1. To: All (#0)
You can keep chanting yer mantra that "It's Bush's fault, it's Bush's fault", but you know full well the economic downturn should rightfully be blamed on the Pelosi/Reid-led Congress of 2007-2008. RATS purposely talked down the Bush economy and instituted damaging legislation in their EEEVIL--and ultimately successful--Jihad fer Power!! And the braindead Obamabot RAT-MORONS cheered him oin every step of the way... Ain't U proud of yerselves?! Sheeesh...MUD
On the other hand Republicans have been modeling positive, confidence boosting, responsibility taking behavior - not.
No argument there, ma'am...Dubyuh ultimately signed whatever KRAP Pelosi/Reid put into law (I don't believe the RATS passed anything significant over Bush's veto, did they??) and I hold Dubyuh personally-responsible fer hiring Hank Paulson and then letting Paulson drive the American economy over the cliff with his Keynesian solutions to our economy that was already over-burdened with outta control Fed spending (authorized by Bush!!) This economic malaise can be laid directly of the feet of BOTH the RATS and the Milquetoast Moderate RINOS, but we gotta at least agree that our economic woes are a direct result of misguided DeeCee intervention in the free market system, right? Regards...MUD
Wrong.
If we had gotten rid of welfare two decades ago we would be sitting on a pile of surplus.
That's an absolute bald faced lie.
war you are the forum spinner and liar. It is an opinion. If those people had been forced to work they would not have been sucking the govt tit. They would have been filling it back up with the taxes they paid.
Over the past 30 years what has unemployment averaged? For a good portion of the last three decades people who WANTED work couldn't find it. Your statement has no basis in fact whatsoever.
Taking money from one person and giving it to someone else is stealing.
If you or I do it, then yes, you're right. If the government does it, it becomes "fiscal policy." Since the government decides what is legal and what is not, anything they do automatically becomes legal. See the difference?
So legal isn't right and it isn't even lawful. I understand.
I was being sarcastic. Your points are, in my opinion, correct. The Federal Leviathan, however, cares little about objectivist ideas like "right" or "wrong." If it's good for them, it's "right." And so on...
And the 'good for them' changes with the needs of those who are in power. Like now, those in power seem to need endless wars, with the endless hype of soldier worshipping.
Then quit defending Obama all the time.
Then show me where I've defended him 'all the time'. You need to realize that because I don't have the zealotry to denounce him with with every breath doesn't make me a fan..
2 Thessalonians 3:6 But we command you, brethren, in the name of our Lord Jesus Christ, that you withdraw from every brother who walks disorderly and not according to the tradition which he[a] received from us. 7 For you yourselves know how you ought to follow us, for we were not disorderly among you; 8 nor did we eat anyone’s bread free of charge, but worked with labor and toil night and day, that we might not be a burden to any of you, 9 not because we do not have authority, but to make ourselves an example of how you should follow us. 10 For even when we were with you, we commanded you this: If anyone will not work, neither shall he eat. 11 For we hear that there are some who walk among you in a disorderly manner, not working at all, but are busybodies. 12 Now those who are such we command and exhort through our Lord Jesus Christ that they work in quietness and eat their own bread.
#60. To: A K A Stone (#59)
(Edited)
The "tradition" = Christianity The "bread" = Jesus body that each person accepts or rejects individually. The "word" = spreading the Gospel so that others may learn the "tradition", do his own "works" and have his own "bread". ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Paul was trying to build a church while suffering severe persecution. He used code words, aka "Shibboleth", when he communicated.
Top • Page Up • Full Thread • Page Down • Bottom/LatestThe worst quarter of the current economic slump is now the final three months of 2008
#8. To: go65, war, nolu_chan, Dr. Skippy, Brian S (#1)
#9. To: Mudboy Slim (#8)
You can keep chanting yer mantra that "It's Bush's fault, it's Bush's fault", but you know full well the economic downturn should rightfully be blamed on the Pelosi/Reid-led Congress of 2007-2008. RATS purposely talked down the Bush economy...
#12. To: lucysmom (#9)
#13. To: Mudboy Slim (#12)
...we gotta at least agree that our economic woes are a direct result of misguided DeeCee intervention in the free market system, right?
#16. To: lucysmom (#13)
#20. To: A K A Stone (#16)
(Edited)
#21. To: war (#20)
#22. To: A K A Stone (#21)
#24. To: war (#22)
#49. To: A K A Stone (#24)
Taking money from one person and giving it to someone else is stealing.
#50. To: Capitalist Eric (#49)
#51. To: A K A Stone (#50)
So legal isn't right and it isn't even lawful. I understand.
#54. To: Capitalist Eric (#51)
If it's good for them, it's "right." And so on...
#56. To: mininggold (#54)
#58. To: A K A Stone (#56)
Then quit defending Obama all the time.
#59. To: mininggold (#58)
Replies to Comment # 59.
End Trace Mode for Comment # 59.
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