The U.S. economy shrank more than twice as much as previously estimated over the past 12 months, it shows a depressing perspective when economics experts where hoping that consumer spending, green shoot investments, and housing mortgage revisions would contribute to a stabilization.
The contraction currently stands at 1.9 percent from the fourth quarter of 2007, compared with the 0.8 percent drop previously on the books, almost doubling in just a year.
“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week to corporate bank entities. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.”
Consumer spending still accounts for 70 percent of the economy, and it too decreased 1.8 percent in last year’s fourth quarter from the same period in 2007, well exceeding the hopeful decline of just a 1.5 percent drop.
The new GDP data also help explain why the unemployment rates and first time buyer mortgage forecloursures skyrocketed 2.3 percentage points last year, the biggest annual jump since 1982.
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