WASHINGTON (AP) - The recession was deeper than the government
The Commerce Department, in revisions issued Friday, estimates
the economy shrank 2.6 percent last year - the steepest drop since
1946. That's worse than the 2.4 percent decline originally
The economy's plunge underscores why the unemployment rate
surged to 10.1 percent in October, a 26-year high.
The revisions in gross domestic product, or GDP, now show zero
growth in 2008. That compares with a 0.4 percent gain previously
estimated.The economy also grew less in 2007 (1.9 percent) than
earlier thought (2.1 percent).
For all three years, consumers spent less and home builders cut
more deeply than had been thought. Those factors help explain the
downward revisions on the economy.
The revisions also show that struggling state and local
governments cut spending more last year than previously thought.
And they spent less in 2007 and 2008.
The economy slid into its worst recession since the Great
Depression in late 2007. Many economists think the recession ended
last summer, although a panel of academics that dates the start and
end of recessions hasn't declared when this one ended. The panel
usually does so well after the fact.
From the start of the recession in December 2007 until the
April-to-June quarter of 2009, the economy sank 4.1 percent. That
was deeper than the 3.7 percent decline previously estimated for
GDP is the broadest gauge of the economy's health. It measures
the value of all goods and services - from machinery to manicures -
produced in the United States.
The Commerce Department's latest revisions reach back to 2007.
They're based on more complete data and on methodology thought to
be more accurate.