A Clue to the Depth of This Recession

Sunday, January 25, 2009

Just how bad were the last three months of 2008? We find out Friday, when the Commerce Department releases its initial estimate of gross domestic product in the fourth quarter. Look for this broad measure of the nation's economic output to have shrunk at about a 5.5 percent annual rate, which would be the worst quarter since 1982. Also this week, the Federal Reserve's policymaking committee meets Tuesday and Wednesday. Usually, one would eagerly await its decision on what to do with interest rates. But the Fed has already cut rates essentially to zero and said it will leave them there for some time, so the big question now is whether the central bank decides to take new, unconventional steps to push rates down.

-- Neil Irwin

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