The Economy is Shrinking at Worse Pace Than Expected

AP is reporting that the economy is shrinking at a pace far worse than originally thought by economists. All this amidst the biggest drop in U.S. exports in 40 years. As reports came out in April of a loosening recession, the Commerce Department’s report released today dashed all those hopes. In fact, the economy ended up performing nearly as bad as it did in the final quarter of 2008, contracting at a 6.3 percent pace.

To put things in perspective, the economy logged its worst six month performance since the late 1950′s and since the recession started in late 2007 this country has seen a loss of 5.1 million jobs. The Obama Administration is still saying his spending bills have yet to take hold and will do shortly, as he looks to ask for more money to dump into this shaky economy. It seems as though the recovery time period predicted by our new Administration keeps getting pushed back. It started with recovery in late 2009 to being somewhere in the middle of 2010. With unemployment rates skyrocketing and the U.S. losing upwards of 650,000 jobs per month, we are looking at a best case scenario outlook of another 7.8 million jobs lost. Add that to the current 5.1 million jobs lost and we are looking at entering into Spring of 2010 with a total of 12.9 million jobs lost.

At those numbers we are looking at a severe recession that could take a decade or longer to recover. All this comes at a best case scenario.

To take a look at exports numbers, take a look at the graph below. The U.S. is the dark blue. If that is not scary then nothing is. See how exports rise over time and then immediately falls off a cliff.