The official report is coming out this morning.
The country tumbled deeper into recession and probably logged its worst economic performance in a quarter-century during the final three months of last year as battered consumers and businesses throttled back spending.The thing that is really griping me is that the very people who caused this mess are still getting billions in bonuses and this for losing trillions of dollars. These guys are not sweating it. For them, life remains comfortable. they haven't had to give up anything. They don't stand in the grocery reading labels and doing the comparisons trying to save a dime while not poisoning themselves. How many of them are worried this morning about whether they can continue their health insurance for another month or two or make the mortgage? For everyone else, add years more of hard work and hope for the best which is looking more dismal everyday. Here is more from the Washington Post:
The U.S. economy is deteriorating at an alarming clip as the housing, credit and financial crises — the worst since the 1930s — feed on each other in a vicious cycle that has proven difficult for Washington policymakers to break.
The Commerce Department is set to release a report Friday expected to show the economy shrank at a pace of 5.4 percent in the October-December period, a much faster descent than the 0.5 percent decline logged in the prior quarter. If economists' forecasts are correct, it would mark the weakest quarterly showing since an annualized drop of 6.4 percent in the first quarter of 1982, when the country was suffering through a severe recession.
"It was a bloodbath," said Richard Yamarone, economist at Argus Research, referring to the economy's fourth-quarter performance.
A massive pullback by consumers is expected to play a prominent role in the economy's worsening backslide. They are cutting back on spending as jobs disappear and major investments — homes, stocks, retirement accounts — tank in value. Businesses are retrenching, too, as profits shrivel and demand wanes from customers in the U.S. and overseas.
Millions of Americans lost more than a quarter of their 401(k) retirement savings in 2008 because of the stock market's collapse, a setback that could force them to work longer or severely curtail their spending as they grow older.If the majority of American workers ever stop and really understand what has been done to them there is going to be some major backlash. It is dawning on a lot of them but the stark reality has yet to shine its hard light on many.
In an analysis of their participants' accounts, Fidelity Investments, Vanguard and T. Rowe Price -- three of the nation's largest 401(k) plan providers -- also found that some employees were further eroding their savings by taking hardship withdrawals to pay for current financial needs.
Many Americans have seen their wealth evaporate with the drop in home values, the rise in the cost of living and the stagnation of wages. Now, as they tap into nest eggs to pay bills, they face leaner retirements as well. Particularly vulnerable are baby boomers who expected to retire in the next few years.