Another round of bad news seems to be upon us
So let's start off with the "good" news. One of the primary reasons that the revised measure of the change in GDP (down at a 6.2% annnual rate in the fourth quarter, instead of the preliminary -3.4%) is that inventories shrank more rapidly than the BEA originally thought. So businesses now probably have less in the way of excess inventories, and they may--may--begin buying for inventory accumulation purposes sooner.
You can read the BEA press release here. Which components of GDP took the largest hits?
Personal Consumption Expenditures on durable goods, down 22.1% on an annual basis. This is not a surprise. Spending on durable goods is fairly easily postponable, and we already knew that new car sales have fallen off the table. [Overall, consumption spending was down only (well, "only" is a relative term; this would usually be considered a sharp decline) 4.3%.]
Gross Private Domestic Investment, down 20.8% on an annnual basis.
Exports fell 23.6%, with exports of goods down 33.6%. On a somewhat cheerful note, exports of services rose 3.5%. (Imports also fell, by 16%.)
All in all, an even more depressing quarter to end 2008 on than we had thought.
And--next Friday, we get the employment report for February, which, from all indications, will be, um, not good.
Additional commentary by Felix Salmon, Brad DeLong, Mark Thoma, Paul Krugman, and Calculated Risk. The New York Times story is here.