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Politics : Formerly About Advanced Micro Devices
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To: Steve Dietrich who wrote (495859)7/16/2009 9:22:36 PM
From: TimF  Read Replies (1) of 1571806
 
12+%?

Not exactly. Perhaps your taking different quarterly figures and adding them together. That would seem to make even if there are problems (for example four 3% drops is more like an 11.5% drop than a 12 percent drop, as each drop is a percentage from a smaller base but the overall drop is measured from the original base), but the problem goes beyond that. The reported figures are annualized. If for example four 3 percent drops where reported in a row the overall drop would be 3 percent.

So lets see what where the drops.

# 1st quarter 2009: -5.5 percent
# 4th quarter 2008: -6.3 percent

bea.gov

3rd quarter 2008: - 0.5%
bea.gov

2nd quarter 2008 was positive, data for 2nd quarter 2009 isn't in yet. But lets say it was -5% (again annualized).

Multiply each quarterly rate by .25 to get the actual reduction that quarter gives you consecutive declines of

.125%, 1.575%, 1.375%, and 1.25% per quarter. The decline is supposed to be slowing, and we've only had about 1/6th of a quarter since Q2 2009 ended, so maybe we have decline another .16% in July.

The economy would then be .99875 * .98425 * .98625 * .9875 * .9984 or .95585 as large as it was before. So GDP would have declined around four and a half percent, maybe slightly less.

Even if GDP decline accelerated in Q2 rather than slowed down you would still have considerably less than a 12+% decline in GDP.
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