Today put an exclamation point on the end of a week of really bad economic news. Q4 08 GDP was the worst in 26 years. Obama characterized the economy as a “continuing disaster”. The WaPo headline was Economic Signs Turn From Grim to Worse. The NYT headline read Steep Slide in U.S. Economy, but Not as Dire as Forecast.
As noted in the WSJ, the only reason that it was not as dire as forecast is because manufacturers were able to ship a bunch of products to stores and count that as revenue, even though the products are just sitting on store shelves. With no sales, the stores will now cancel orders for new products and Q1 09 will see the GDP hit.