Steep Slide in U.S. Economy as Unsold Goods Pile Up (rapid inventory pile-up slowed GDP fall)

NYT ^ | 01/31/09 | LOUIS UCHITELLE

[TigerLikesRooster]

January 31, 2009

Steep Slide in U.S. Economy as Unsold Goods Pile Up

By LOUIS UCHITELLE

The economy shrank at an accelerating pace late last year, the government reported on Friday, adding to the urgency of a stimulus package capable of bringing the country back from a recession that appears to be deepening.

The actual decline in the gross domestic product — at a 3.8 percent annual rate — fell short of the 5 to 6 percent that most economists had expected for the fourth quarter. But that was because consumption collapsed so quickly that goods piled up in inventory, unsold but counted as part of the nation’s output.

“The drop in spending was so fast, so rapid, that production could not be cut fast enough,” said Nigel Gault, chief domestic economist at IHS Global Insight. “That is happening now, and the contraction in the current quarter, as a result, will probably exceed 5 percent.”

[TigerLikesRooster]

But that was because consumption collapsed so quickly that goods piled up in inventory, unsold but counted as part of the nation’s output.

Talking about an irony...

[TigerLikesRooster]

Ping!

[iopscusa]

‘Oh the Humanity’ type of doom-hype from the MORONS;
The actual decline in the gross domestic product, at a 3.8 percent ANNUAL RATE = <1.0% in 4th quarter. The bootum may be here with the doom crazies reaching 90%+. I bet the smart $ is buying.

[TigerLikesRooster]

At least we settled the debate on “are we really having a recession.” WE ARE.

[RSmithOpt]

That's when they counted it before they should have voted not to count it??? Anything to hose the taxpayer with slant, deceit, and theft. Interesting that near the bottom of the excerpt...will most likely exceed 5 percent....LOL!! Try exceeding 10% minimum. The sh$$t is just now started rolling downhill at a recognizable pace according to the media and the elected double-speakers.

What is not being printed or talked about is 12-18 mos from now after additional layouts have been made and those unemployed now benefits will have run out....then we need to recalculate the nation's debt versus the GDP....that will tell the real story....of course the goobermint will lie like hell as to fudge the numbers to the public.... 2 sets of books are being kept.

[AD from SpringBay]

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[RSmithOpt]

Just how well is $50-$70 trillion of BS derivatives economy going to suck money here in the United States? I figure we can look at the percent US GDP 2004-2007 versus global, then take that equivalent percentage from the 50-70 trillion and subtract that figure from our economy; then add the $3.6 trillion in new pork and bailouts to the final total. That Tiger, is the real numbers.

If my economic pointers and general market(s) scenario are correct, I see a minimum 35% shrinkage in the GDP (compared to same time 2007) for the bottom. The GDP will tank and all other factors to follow....those other factors like increases in lending, etc., will lag that bottom a minimum of 6-8 months.

Besides inflation, only food, energy, taxes, medical, and precious metals will show increases with first mentioned the lowest increases, energy next (higher), etc., the last, gold, silver and platinum.

My point is that IMHO, we will see unseen unemployment percentage of workforce surpass 1947, food, energy, medical are necessities (the only places they can hose the citizen for this phase), tax increases because our leaders say there's no other way to balance their budgets, and a mad rush for those with money to hold value buying precious metal. I see a minimum 10 yr for this downturn to turn around starting 2Q 2008.

[RSmithOpt]

layouts = layoffs

[expat_panama]

we settled the debate on “are we really having a recession.”

It's politics that deals in debates; in business we use facts.

It's a fact is that we've finally have two quarters in a row of shrinking GDP, but the press is saying that all of 2008 was a recession even though the GDP grew.  Their reasoning is at the beginning of the article: "adding to the urgency of a stimulus package..."  Doom'n'gloomers want big government to rescue and protect them, so worse is better..

[org.whodat]

The bootum may be here with the doom crazies

No speaka- the - crazy, what does that say in english???

[org.whodat]

The bootum may be here with the doom crazies

No speaka- the - crazy, what does that say in english???

[mad_as_he$$]

Most parts of the country have been in a recession since November 2007.

[bert]

While examining the underside of a leaf, the forest was missed

[RedEyeJack]

The Democrats efforts over the last 6 years to talk down the economy have culminated in a consumer confidence meltdown. The drop in the markets was the spark need to start the conflagration. Now Obama and the Democrat congress must reverse what they have created and their answer is only Porkfest ‘09... Spending like crazy to “take advantage of the crisis” and reward their political supports with taxpayer swag. They made the mess and if the Republicans are smart they can force a real stimulus because the country is waking up to the game...

[4Liberty]

We are paying for people’s mortgages right now.

So for a while, we can’t pay for (accumulating) inventories of other things.

There is no big surprise here. It’s called a trade off.

Let’s offer a big “Thanks!” to the Dems’ C.R.A. social-engineering.

IDIOTS

[BfloGuy]

The Federal Reserve ended the mid-’70s and early ’80s recessions by cutting interest rates sharply to encourage borrowing and spending in the private sector.

Wrong. The recession of the early 80's was caused by the Fed's raising interest rates to stop inflation. The recession ended in 1983 when the first tranche of Reagan's tax cuts took effect.

[GOPJ]

Inflation’s next - that’s bad for the market. There will be false rallies - dollar cost averaging might be OK - but it’s not the time to jump in...

[expat_panama]

The recession ended in 1983...

Actually, the NBER "official" ending is Nov. '82.   The Fed had been raising interest rates until inflation caved in July '82 and that's when they started lowering them.

[underbyte]

“”Inflation’s next - that’s bad for the market. There will be false rallies - dollar cost averaging might be OK - but it’s not the time to jump in...””

I am taking a third of my self employed business cash Monday and putting it in PM’s as a hedge against inflation or currency devaluation.

[Freedom_Is_Not_Free]

And just like that, the debate moves on to “are we in for a depression”.