Gross Domestic Product Falls 3.8% in 4th Quarter of 2008

The Bureau of Economic Analysis released its first estimate of change in Gross Domestic Product (GDP) for the fourth quarter of 2008. Real GDP (adjusted for inflation) fell 3.8% in the 4th quarter compared to the preceding quarter. GDP fell 0.5% in the 3rd quarter. This represents the fifth quarter during the Presidency of George W. Bush when the GDP has fallen. This is the first time we’ve experienced back-to-back quarterly declines since the presidency of George H. W. Bush.

Today’s estimate is called the “advance” estimate. In about a month, a revised “preliminary” estimate will be released, with the final number coming about a month later.

These numbers continue to indicate that the nation is experiencing its worst economic condition since 1982 during the second year of the administration of President Ronald Reagan. In late 1981 and early 1982, real GDP fell 5.0% and 6.6% in consecutive quarters. Yesterday’s initial jobless claims number also represent the worst numbers since this same period over 25 years ago.