America’s gross domestic product, the nation’s output of goods and services, plunged at an annual rate of 6.2 percent in the final quarter of 2008, according to revised figures released by the Commerce Department Friday. That’s the sharpest drop in GDP since the first quarter of 1982.
Economists at the investment firm Goldman Sachs estimate that the decline, coupled with another slide in the current quarter, may end up as the US economy’s worst back-to-back quarters in half a century.
A cutback in consumer spending is not only dragging down US growth, but global growth as well. Japan and the European Union are now in recession, and China’s export-driven economy has downshifted sharply. Now it’s not just that Americans aren’t importing — neither is the rest of the world. A decline in exports by US corporations was one key factor behind Friday’s GDP surprise.
The suddenness of the drop has caught much of the world off guard.
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