US Growth Rate at Record Lows
January 30, 2009
Today’s release of the Q4 2008 growth rate highlighted that the US economy shrank by 3.8%, a rate of contraction not witnessed since Q1 1982. This was primarily driven by consumer spending which slumped by 3.5%. The quarterly decline was the second consecutive quarter of negative growth as Q3 2008 narrowed by 0.5%. The release was much better than had been anticipated, however it does confirm that the recession was deepening over this period. As a consequence the US economy only grew by 1.3% over 2008, the slowest pace of growth since 2001. Despite the weak release the US Dollar rallied against most of the worlds major currencies as a clear lack of risk appetite remained.