US GDP revised down for 3rd quarter, consumer spending plunges

Bloomberg

The U.S. economy shrank in the third quarter faster than previously estimated as consumer spending plunged by the most in almost three decades.

Gross domestic product contracted at a 0.5 percent annual pace from July through September, the most since the 2001 recession, according to revised figures from the Commerce Department today in Washington. The government’s advance estimate issued last month showed a 0.3 percent decline.

. . .

Consumer spending, which accounts for more than two-thirds of the economy, dropped at a revised 3.7 percent annual rate, more than the 3.1 percent decrease estimated by the government last month. It was the first decline since 1991 and the biggest since 1980, after President Jimmy Carter imposed credit controls.

This is an incredible downturn from 2nd quarter numbers. From April to June GDP showed a +2.8% growth. July through September saw a complete about face to a -.5% decline. There is likely to be one more revision, most probably to an even lower number, before the year is done.

The numbers for 4th quarter, measuring October through December, will be abysmal.

reply to post by anachryon


Thanks for finding this article! I have been looking around for the GDP numbers for the last 30 minutes. Market futures just keep climbing. I guess the only thing that matters is bailouts...

reply to post by ag2000


Not a problem; the numbers kind of got buried under the fresh $800B added to our tab.

The consumer spending number is very interesting. Given that these publicly released figures are "massaged" to appear better than they really are, what does this say about the few holdouts going on about "the mall/restaurant/Target is packed, people are spending!" Uhh, no they're not, not anywhere near what they were 3 months ago. This is proof that they're not, and that they haven't been for a couple months now.

of course consumer spending is down. Consumers, even though they have not lost their jobs, are scared. They are saving money, putting off buying things they don't really need, like flat screen tv's or new cars. Between the government and the media harping on how bad everything is, everyone is terrified.