As expected, the revisions are trending down. Remarkably, the US economy is declining in real terms, which, at 6.2 percent, is almost the same annual rate as the real contraction that took place from 1930 to 1931, 6.4 percent. A few of you may recall that after the last report, I wrote the following: Notice that according to the current Advance report on the fourth quarter of 2008, the economy actually grew 1.3 percent this year. I’m guessing that they just might revise that down a bit in the next report or two. So, it’s not surprising to learn that the 2008 figure was revised down to 1.1 percent today.
| Quarter | Adv | Pre | Final | Rev | Annual |
| 2008 Q4 | -3.8 | -6.2 | 1.1 (1.3) | 2008 Q3 | -0.3 | -0.5 | -0.3 | -0.5 |
| 2008 Q2 | 1.9 | 3.3 | 2.8 | 2.8 | 2008 Q1 | 0.6 | 0.9 | 1.0 | 0.9 |
| 2007 Q4 | 0.6 | 0.6 | 0.6 | -0.2 | 2.0 |
| 2007 Q3 | 3.9 | 4.9 | 3.9 | 4.8 | |
| 2007 Q2 | 3.4 | 4.0 | 3.8 | 4.8 | |
| 2007 Q1 | 1.2 | 0.5 | 0.6 | 0.1 | |
| 2006 Q4 | 3.5 | 2.2 | 2.5 | 1.5 | 2.8 |
| 2005 Q4 | 1.1 | 1.6 | 1.7 | 1.3 | 2.9 |
| 2004 Q4 | 3.1 | 3.8 | 3.8 | 2.4 | 3.6 |
UPDATE – By way of comparison, Roundtine points out the GDP growth assumed in Obama’s budget:
2009: -1.2
2010: 3.2
2011: 4.0
2012: 4.6
It will be interesting to hear an explanation of how the economy is supposed to enjoy such rapid growth when it did not reach such a pace even during the recent housing boom.