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THURSDAY, March 26, 2009 REAL GDP DECLINES 6.3 PERCENT IN FOURTH QUARTER Corporate Profits Decline Sharply Real gross domestic product (GDP) declined 6.3 percent in the fourth quarter of 2008 after declining 0.5 percent in the third quarter, according to the “final” estimates from the Bureau of Economic Analysis. Gross Domestic Product The decrease in real GDP reflected: • • • • A sharp downturn in exports A continuing decline in consumer spending A larger decrease in business investment, mainly in equipment and software A continuing decline in housing Quarter-to-Quarter Growth in Real GDP 7 5 Percent 3 1 -1 -3 -5 -7 I II III 2005 IV I II III 2006 IV I II III 2007 IV I II III 2008 IV Real GDP growth is measured at seasonally adjusted annual rates. Corporate Profits Fourth-quarter profits fell 16.5 percent, the largest decline since the fourth quarter of 1953. Financial corporate profits fell 59 percent; nonfinancial corporate profits fell 11 percent. Quarter-to-Quarter Growth in Corporate Profits 20 15 10 Percent 5 0 -5 -10 -15 -20 I II III IV 2005 I II III 2006 IV I II III IV I 2007 II III IV 2008 Corporate profits growth is measured as the percent change from the previous quarter. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. NOTE: The “advance” estimate of GDP for the first quarter of 2009 will be released on April 29, 2009. Contact: Ralph Stewart or Thomas Dail (202) 606-2649 Bureau of Economic Analysis, U.S. Department of Commerce