Last few years were even worse than you thought
By Neil Irwin
News coverage of the second quarter GDP report (including my own) will focus mainly on what it tells us about how the recovery is shaping up in 2010. But this report also included revisions to components of GDP going back to 2007.
So what do we know now about the recent past that we didn't know then?
The upshot is that things were even weaker in the 2006 to 2009 time frame than was previously recognized. In 2008, for example, the Commerce Department had earlier estimated 0.4 percent growth for the year; it now estimates that GDP was unchanged.
While the Great Recession began in 2008, you'll recall, it was a relatively mild downturn in the early months of the year and only turned severe in the fall.
That year, commercial real estate investment, inventories, and imports were bigger drains on economic activity than earlier estimated.
Overall, for the 2006 to 2009 period, GDP decreased at an average annual rate of 0.2 percent, compared to a zero percent average annual change previously estimated.
We already knew that the late years of the last decade were pretty disastrous for the American economy; the revised data put an exclamation point on that conclusion.
July 30, 2010; 9:32 AM ET
Categories: U.S. Economy
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