Economy Shrinks By 6.1% in Q1 2009

Economy Shrinks By 6.1% in Q1 2009


That’s 3 quarters in a row, and that hasn’t happened in nearly 40 years.

Also, the severity of the contraction during the last 2 quarters hasn’t happened for nearly 60 years.

More details about why…

  • Real nonresidential fixed investment decreased 37.9% in the first quarter.
  • Nonresidential structures decreased 44.2%.
  • Equipment and software decreased 33.8%.
  • Real residential fixed investment decreased 38%.

The only glimmer of hope? Consumer spending went up 2.2%, when it had decreased by 4.3% in the previous quarter. Still, consumer spending isn’t going to pull us out of this tailspin, but it needs to stay up if we want businesses to start spending and investing again.

More as it develops…

  • kranky kritter

    Good thing we’re headed in the right direction. Just imagine what the wrong direction would look like… .

  • Simon

    KK, I frequently find myself accosted with Mencken’s observation that the common man knows what is good for him and deserves to get it – good and hard. The country may well feel that we are now going in the right direction – that doesn’t mean that we are. Indeed, as Gingrich has pointed out, the change in direction is barely perceptible: the last administration believed in big federal government interventionism, and so does this one. It was the wrong direction then and it’s still the wrong direction now. And to the extent the direction has shifted, it’s shifted for the worse. I suspect that what is really going on is simply that people were sick to death of Bush and are expressing how relieved they are to be rid of him (and, to some extent, their inexplicable but pervasive trust of Obama personally).

  • J. Harden

    Still, consumer spending isn’t going to pull us out of this tailspin, but it needs to stay up if we want businesses to start spending and investing again.

    You’re sending me mixed signals here honey. I thought the government was going to spend for us to drag us out of the hole. Geez, the government is spending trillions upon trillions and now your asking the individual citizens to spend more…

    You know, I’ll tell you the same thing I tell the little lady, there’s only 24 hours in a day and all this spending requires someone go to work on occassion.

    I just can’t wait for the Feds to take over MasterCard or Visa!

  • Anne

    It seems to me when any report is focused on certain figures such as the gross shrinking of the economy and other supporting data, it’s only one view about our economy, perhaps an important one. Simon comments on the public’s perceived sense of direction and how it’s the wrong direction. J. Harden writes about how increased consumer spending, traditional “rescue” tatice, isn’t going to solve our economic problems. Everyone is seeing things through acertain lens and these are not rose-colored, for sure.

    I consider myself pretty ignorant and naive about these matters. However, I want to comment on recent demonstrations of a new movement and direction, I choose to believe that when enough Americans care about the direction of our economy and country by conducting new types of protests and marches as we are witnessing right now, something is different under our sun. It’s inspiring to see that that “politics as usual” has a visible alternative in the limelight. Millions of small voices need to be continually heard so the powers-that-be are defeafened and over-powered into moving in a new direction.

    Wouldn’t it be something if we can begin to embody a true democracy rather than the moneycracy that has prevailed for too long?