Final 3Q2008 GDP came in today at -0.5%, which is even from the -0.5% second reading on November 25 and down from the -0.3% initial reading we got October 30. As of November 25, the -0.5% was the largest quarterly decline since the tail end of the last recession in 2001. Six days after that release, the NBER declared a recession has been in effect since December 2007. They took pains to counter the popular definition of recession as two consecutive quarters of negative GDP growth, saying that they look at many factors in addition to GDP.
GDP growth for the previous three quarters have all been revised downward after their initial readings, and 4Q2008 GDP is expected at -6.0%. Final GDP growth figures for the past four quarters and GDP press release highlights are below. Also below is news on home sales data.
4Q2007: -0.2% (final)
1Q2008: +0.9% (final)
2Q2008: 2.8% (final)
3Q2008: -0.5% (final)
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 0.5 percent in the third quarter of 2008.
The decrease in real GDP in the third quarter primarily reflected negative contributions from personal consumption expenditures (PCE), residential fixed investment, and equipment and software that were partly offset by positive contributions from federal government spending, private inventory investment, exports, nonresidential structures, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
Notable offsets were an upturn in inventory investment and an acceleration in federal government spending.
Median prices of existing homes were -13.2% year over year through November and unsold existing home inventory rose to 11.2 months of supply.
New Home Sales were the lowest in 27 years at 407,000 and unsold new home inventory fell to 11.5 months of supply.