Gov't: 2007-09 recession worse than we thought
Last Updated 8:41 a.m. ET
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.
The economy slowed in the first six months of 2011 to its weakest pace since the recession ended. High gas prices and scant income gains forced Americans to sharply pull back on spending.
The Commerce Department says the economy expanded only 1.3 percent in the April-June period.
Among the previous 10 postwar recessions, output in only two dropped by more than 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.
The government attributed the bigger declines in output in part to weaker consumer spending and business investment than previously estimated.
By year, the government's new figures show that the economy took a much bigger hit in 2009, when output shrank 3.5 percent. The previous estimate had shown a decline of 2.5 percent that year.
In 2008, the new estimate shows the economy contracted by 0.3 percent. The previous estimate had indicated that output was unchanged for that year compared with 2007.
The last recession began in December 2007 and lasted until June 2009. Though the economy has been growing since then, growth has been subpar. And the unemployment rate has remained elevated; it's now 9.2 percent.
The revisions showed that growth in 2010 was a bit stronger than previously estimated. They put growth for all of 2010 at 3 percent, up from a previous estimate that the economy grew 2.9 percent last year.
The revisions to the country's gross domestic product, the total output of goods and services, used more complete data for such items as consumer and business spending.
The government's annual revisions are released each July, along with its first estimate of growth for the April-June quarter of the current year.
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So isn't that evidence that all the economists who have been making certain diagnoses and perscribing tax cuts as remedies, just might possibly be TOTALLY off the mark?
Bernanke was wrong yet AGAIN. Knock me over with a feather.