In the last couple of days we have observed a number of economic releases that seem to highlight the severity of this downturn. GDP figures in the U.S. have been released most recently for the fourth quarter of 2008. Although an estimate, at -6.2% (annualized), it is significantly worse than expectations and according to the data, the second quarter of contraction for the economy. January durable goods orders which measures household consumption of goods defined as lasting at least 3 years or more was more than twice as negative than expected. More telling, however, is the fact that this is the 6th consecutive drop in durable goods orders! A similar pattern has also been observed for a number of other critical indicators such as jobless claims which not only has been systematically worse than expectations but also adds to a consecutive series of negative results.
It should be noted that the U.S. is no exception and that dire figures are sprouting out almost everywhere. In Japan, for example, the latest industrial production figures indicate a drop of a whopping 10%, making it the largest monthly drop since records began more than half a century ago. It is also the 4th consecutive month in which a drop has been recorded. This comes on the back of a contraction of 46% in exports.
