Gross domestic product slips 3.8% in 4Q

Advance estimates for 2008’s fourth-quarter gross domestic product — the output of goods and services produced by labor and property located in the United States — show a decrease of 3.8% from the third quarter, according to the Bureau of Economic Analysis. This drop comes after a third-quarter dip of 0.5%. The fourth-quarter decline is the largest since the first quarter of 1982, when it dropped 6.4%. For 2008, annual GDP growth was 1.3%. Export rates struggled in the fourth quarter, declining 19.7%, compared with an increase of 3% in the third quarter. Imports dropped 15.7% Personal income levels took a beating as well, decreasing a cumulative $35.3 billion (1.2%). “The deceleration in real GDP primarily reflected a sharp deceleration in personal-consumption expenditures, a downturn in equipment and software, and decelerations in exports, and in state and local government spending, that were partly offset by a sharp downturn in imports, an acceleration in federal government spending, and a smaller decrease in private inventory investment,” according to the BEA report. The final report for the fourth quarter of 2008, as well as the final annual report for 2008, will be released March 26.