The advance U.S. GDP report came in better than expected for the fourth quarter of 2008, contracting by 3.8% against expectations of a 5.5% decline, according to the Bureau of Economic Analysis on Friday. The previous quarter's 0.5% contraction was unrevised.
The negative figure is the third decline in quarterly GDP since the credit crisis began in August 2007, as the final quarter of 2007 saw a 0.2% contraction.
Prior to the release, forecasts ranged from a 3.0% contraction to a 7.0% decline.
Personal consumption, which accounts for 70% of GDP in the U.S., contracted by 3.5% in the quarter, in line with expectations and less harsh than the 3.8% contraction in Q3.
In the report's price index, personal consumption goods were down 0.1%, from a 3.9% gain in Q3, while the core figure that excludes food and energy advanced by 0.5%, following a 0.7% advance in Q3.
The Bureau emphasized that the fourth-quarter 'advance' estimates are based on source data that are incomplete or subject to further revision by the source agency.
By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009