Friday, July 31, 2009

GDP Shrinks, Economy 2X Worse Than Predicted: Press Sees Good News

The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said today in Washington.

The economy sank at a pace of 1 percent in the second quarter of the year, the Commerce Department report shows. Many economists were predicting a 1.5 percent drop. This prompted many in the media to peg the report as good news.

With the contraction in the second quarter, U.S. GDP has fallen for four straight quarters for the first time since government records started in 1947.

AP said that the recession is winding down. CNN said the pain is easing. AFP said the economy is improving. Reuters said U.S. economy fares better than expected.

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