After Revised GDP Figures Showed That The '07-'09 Recession Was Far Worse Than Previously Known ...

McClatchy: Economic Data Revisions Show That “The Great Recession, Already The Worst Downturn Since The 1930s, Was Even More Damaging Than Previously Recognized.” On July 29, the Bureau of Economic Analysis released revisions to its estimates of the economy from 2008-2010. McClatchy reported:

BEA also unveiled its annual revision of economic data back to 2008. The revision found that in 2008 the economy actually contracted rather than eking out a tiny gain as initially reported, and 2009 growth was almost a full percentage point slower than estimated earlier.

The quarterly percentage change in real gross domestic product was revised down for six of the 12 quarters reviewed. That means the Great Recession, already the worst downturn since the 1930s, was even more damaging that previously recognized. [McClatchy, 7/29/11]

AP: “The 2007-2009 Recession ... Was Even Worse Than Previously Thought.” The Associated Press reported:

The 2007-2009 recession, already in the record books as the worst in the 66 years since the end of World War II, was even worse than previously thought.

From the start of the recession at the end of 2007 to the end in June of 2009, the U.S. economy shrank 5.1 percent. That is 1 percentage point worse than the previous estimate that the recession reduced total output during that period by 4.1 percent.

The new estimates emerged from the annual revision of economic data prepared by the Commerce Department's Bureau of Economic Analysis and released Friday.

Among the previous 10 postwar recessions, output in only two dropped by more 3 percent. In the 1957-58 recession, the economy contracted 3.7 percent. And during the 1973-1975 downturn, the economy fell 3.2 percent from the start of the recession to the end. [Associated Press, 7/29/11]

WaPo: Moody's Chief Economist Mark Zandi Said Revised Data Shows The Recession Was Much More Severe Than Thought. The Washington Post reported: “As Moody's chief economist Mark Zandi told me this morning, the revisions suggest that the recession following the financial crisis was much, much more severe than we'd thought--the economy actually shrank at a 8.9 percent annual rate the fourth quarter of 2008 and 6.7 percent in the first quarter of 2009 (earlier estimates had shown a smaller, 5.9 percent annualized drop across the two quarters).” [The Washington Post, 7/29/11]

Dean Baker: “The Annual Revisions Show .... The Post-Lehman Plunge Is Even Sharper Than Had Previously Been Reported.” Dean Baker, co-director of the Center for Economic and Policy Research, said of the revisions:

The annual revisions in this report show a somewhat different picture of the recession. Most importantly, the post-Lehman plunge is even sharper than had previously been reported. The economy shrank at a 7.8 percent annual rate in the fourth quarter of 2008 and first quarter of 2009 compared with a previously reported 5.9 percent annual rate. The decline in the second quarter was just 0.7 percent, followed by growth in the third quarter of 1.7 percent, suggesting that the stimulus was effective in turning the quarter around. The downward revision to the first-quarter data coupled with the revision of the fourth-quarter growth to 2.3 percent from 3.1 percent suggests that the winding down of the stimulus has seriously dampened growth. [Center for Economic and Policy Research, GDP Bytes, 7/29/11]

IHS Global Insight: Revisions “Deepened The Recession Substantially.” An IHS Global Insight report on the revised GDP figures noted:

The big surprises were in the historical revisions. These deepened the recession substantially. The fourth quarter of 2008, right after the Lehman failure, now shows an 8.9% annual rate of decline in GDP (previously 6.8%), and now represents the worst single-quarter decline in GDP since the 10.4% drop in the first quarter of 1958, exceeding the 7.9% decline in the second quarter of 1980. The revisions then made the initial rebound a bit faster (with growth running just below 4% in the first and second quarters of 2010), but then showed the recovery losing momentum over the second half of 2010 and tailing away to just 0.4% in the first quarter of 2011 (previously 1.9%) and 1.3% in the second. Although the second quarter was disappointing, the revisions mean that it actually shows stronger growth than the first. [IHS Global Insight, 7/29/11]

... Tucker Carlson Dismissed Those Facts As Irrelevant To A Discussion Of The Economy

Fox's Tucker Carlson: It's “Just Sad” To Bring Up GDP Figures During A Discussion Of The Economy. On America's Newsroom, Fox News contributor Tucker Carlson declared that “the economy is a disaster.” Fox News contributor Alan Colmes cited the revised Gross Domestic Product figures from the height of the recession, saying: “Well we just found out last week, that the new numbers came out, the Bush recession was a lot worse than originally thought.” Carlson dismissed those revisions, responding: “Oh Alan, please, come on, Alan. That's just sad ... you can do better than that.” [Fox News, America's Newsroom, 8/3/11]