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Final Report Leaves GDP Unchanged for Third Quarter
Real gross domestic product (GDP), the output of goods and services produced by labor and property located in the U.S., decreased in the third quarter of 2008 at an annual rate of 0.5 percent since the second quarter, according to final estimates released by the federal Commerce Department's Bureau of Economic Analysis on Tuesday.
The new GDP estimates are based on more complete source data than those available for preliminary estimages issued last month, according to the bureau. In the preliminary estimates, the decrease in real GDP was also 0.5 percent.
Corporate profits from current production decreased $18.5 billion in the third quarter, compared with a decrease of $60.2 billion in the second quarter, the bureau reported; and taxes on corporate income decreased $13.3 billion in the third quarter, in contrast to an increase of $3.9 billion in the second.
Analysts believe that GDP, the economy's total output of goods and services, is falling at an even sharper pace in the current quarter, reflecting the fallout from the worst financial crisis to hit the country since the Great Depression, according to Newsday. Some believe the GDP plunge could be as large as 6 percent in the current October-December quarter, which would make it the largest decline since a 6.4 percent drop in the first quarter of 1982.
Many economists think this quarter could mark the low point of the recession, which is already the longest in a quarter century, having started in December 2007, according to The New York Times.
They are forecasting smaller G.D.P. declines in the first and second quarter of next year before the economy starts growing again next summer. If the recession ends in June 2009, as many economists are forecasting, it would have lasted 18 months, making it the longest recession in the post-World War II period.
The bureau blamed the 0.5 drop in GDP on a sharp downturn in personal conusmption expenditures, deceleration in exports, a smaller decrease in imports, a drop in nonresidential construction, state and local government spending and an acceleration in federal government spending.