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Economic Contraction Continues Unabated

The first advanced estimate ( of 1Q/2009 GDP growth has come in at -6.1% (annualized), nearly identical to the 4Q/2008 performance of -6.3%.  Revisions to this number are likely before a final estimate is determined in three months.  For the previous quarter (4Q/2008) the first advanced estimate was also -6.1%, but then was subsequently revised downward twice to the current -6.3%.

The GDP decline in this recession is on track to rank third in U.S. history since 1928.  Unless GDP grows by approximately 3% in 2Q/2009, the depth of this recession will be exceeded only by lows reached in 1931 and 1945.  No one is on record predicting any GDP growth for the second quarter.

The first quarter drop in GDP (-1.5% quarter to quarter) is 75% of the Treasury's nominal stress case of -2.0% for the entire year 2009 and nearly half of the extreme stress case of -3.3% (

The Financial Times ( has a more complete review of the GDP news release.