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To: TimF who wrote (34423)	3/26/2009 12:42:19 PM
From: DuckTapeSunroof	Respond to of 71588

ECONOMIC REPORT: GDP revision shows 6.3% decline in fourth quarter Worst quarter in 26 years led by weak spending, investment, exports By Rex Nutting, MarketWatch Last update: 10:39 a.m. EDT March 26, 2009 Comments: 40 marketwatch.com{FE8D487B-D668-44F6-8324-FD9360544BAE}&dist=msr_6 WASHINGTON (MarketWatch) -- 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. "It is far too early to get bullish on the economy, as a lot could go wrong between now and mid-year, we still have no evidence that the meltdown in the labor market has begun to abate, and the federal government seems to be working very hard to sabotage a recovery," wrote Stephen Stanley, chief economist for RBS Greenwich Capital. In 2008, the economy grew 1.1%, the slowest growth since 2001. GDP fell at a 0.5% pace in the third quarter. Read the full government report: bea.gov The recession that began in December 2007 intensified in the fourth quarter following the government's rescue of several large financial institutions and the collapse of Lehman Bros. The ensuing credit squeeze has driven consumer and business confidence to generational lows, and cost 3 million Americans their jobs. Most economists don't expect GDP to grow until the second half of the year, when the leading edge of the $787 billion fiscal stimulus plan begins to have an impact. Growth next year is expected to be so tepid that unemployment is likely to keep rising. In a separate report, the Labor Department said first-time claims for unemployment benefits rose by 8,000 to 652,000 last week. Continuing claims jumped by 122,000 to a record 5.56 million. See full story: marketwatch.com The slump in the economy in the fourth quarter was broad based, with declines in every major sector except the federal government. Corporate profits fell at the fastest pace since 1953. Final sales to domestic purchasers -- domestic demand -- fell at a 5.8% annual rate, the biggest drop since the second quarter of 1980. A month ago, the government agency said the economy fell at a 6.2% annual rate. The downward revision to a 6.3% drop was smaller than the 6.7% decline expected by economists surveyed by MarketWatch. See Economic Preview. marketwatch.com The big revision came from inventories, where a small increase in stockpiles that was originally reported turned into a small decline in the final revision. There were other minor revisions, mostly offsetting each other.....