Most expect Q4 to be bad. Very bad. Despite flimsy - at best - evidence of business tax cuts helping to boost the economy, somehow, the new plan in Washington is full of them. How many more tax cuts is business going to receive before everyone else starts seeing some benefits? What a waste of time and money to win over the GOP who even then won't support the efforts to save the economy. We're in this situation because of the Republicans yet they still don't get it.
The official report is out this morning.
The country tumbled deeper into recession and probably logged its worst economic performance in a quarter-century during the final three months of last year as battered consumers and businesses throttled back spending.
The U.S. economy is deteriorating at an alarming clip as the housing, credit and financial crises — the worst since the 1930s — feed on each other in a vicious cycle that has proven difficult for Washington policymakers to break.
The Commerce Department is set to release a report Friday expected to show the economy shrank at a pace of 5.4 percent in the October-December period, a much faster descent than the 0.5 percent decline logged in the prior quarter. If economists' forecasts are correct, it would mark the weakest quarterly showing since an annualized drop of 6.4 percent in the first quarter of 1982, when the country was suffering through a severe recession.
"It was a bloodbath," said Richard Yamarone, economist at Argus Research, referring to the economy's fourth-quarter performance.
A massive pullback by consumers is expected to play a prominent role in the economy's worsening backslide. They are cutting back on spending as jobs disappear and major investments — homes, stocks, retirement accounts — tank in value. Businesses are retrenching, too, as profits shrivel and demand wanes from customers in the U.S. and overseas.
