Tuesday, February 03, 2009

The Alarming Collapse of U.S Domestic Demand

Friday's U.S. GDP numbers showed that nominal spending or domestic demand in the United States crashed in the 2008:Q4. The BEA release showed that final sales to domestic purchasers--GDP minus private inventory change minus exports plus imports--declined at an annual rate of about 10%. This rate is the sharpest quarterly decline for the entire post World War II era. >> more
It is unwise to draw any direct parallels, as our two economies are substantially different. Nevertheless, what should concern us is that we are talking about the world’s largest economy, and when America goes south, the related implications affect us all. Click on the graph at the link provided to get an enlarged view; it’s a steep decline.

See also: U.S. economy shrinks 3.8% in Q4

On a world stage, it is not looking good so just perhaps, Rudd ought to slow down the spending a tad, it may be money down the drain; an exercise in futility.

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