Recession Took Bigger Bite Out of U.S. Economy Than Previously Estimated
By Alex Kowalski - Jul 29, 2011 8:30 AM ET
Bloomberg.com
The 2007-2009 recession gouged the world’s largest economy more deeply than previously estimated and the recovery lost momentum throughout 2010 before stalling this year, revised figures show, painting a bleaker picture that may raise concern over the outlook for U.S. growth.
Gross domestic product shrank 5.1 percent from the fourth quarter of 2007 to the second quarter of 2009, compared with the previously reported 4.1 percent drop, the Commerce Department said today in Washington. The second-worst contraction in the post-World War II era was a 3.7 percent decline in 1957-58.
The depth of the economic slump better explains why the jobless rate doubled, climbing from 5 percent at the start of the downturn to a 26-year high 10.1 percent in October 2009. The strongest quarter of the recovery is now the first three months of last year. Growth decelerated every quarter thereafter.
“The overall recession is indeed deeper,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, told reporters this week. “This is the Great Recession, the deepest one we’ve had in the post-WWII era.”
The economy expanded at a 1.3 percent annual rate from April through June of this year, less than forecast, the Commerce Department’s advance report for the second showed. Growth in the prior three months was revised down to 0.4 percent from 1.9 percent. At $13.27 trillion in the second quarter, GDP has yet to surpass the pre-recession peak.
By the fourth quarter of 2009, the updated figures showed GDP was $205.5 billion less than previously reported, a cut equivalent to the size Ireland’s economy.
Article continues: http://www.bloomberg.com/news/2011-07-29/recession-took-bigger-bite-out-of-u-s-economy-than-previously-estimated.html
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