1. News & Issues

2008 GDP Statistics

The Financial Crisis Bludgeons the Economy

By

GDP Growth

(Credit: Bill Pugliano / Getty Images)

Updated August 13, 2013
In 2008, the recession hit with a vengeance. There were three quarters where the economy contracted. The subprime mortgage crisis of 2006 and the banking liquidity crisis of 2007 had finally spread to the general economy and the stock market.

Here's the blog posts for each GDP release in 2008. (Go to Current GDP Statistics for an explanation of the difference between advance, secondary and final GDP reports.) You will also note that these estimates have been revised substantially by the BEA each year, based on additional data. The current estimate is first, and each prior year's estimate follows in parentheses. This is pretty much the only record I've seen of all these revisions.

Take a look at Q3, and you'll see the recession was much, much worse than we knew at the time. The BEA revised estimate shows the economy contracted 8.3%, much worse than the 5.4% contraction originally proposed. It is also worse than any quarterly contraction in any recession since The Great Depression. (See History of Recessions for more.)

2008 GDP for the Year: -.03% (-.3% in 2011 revision, 0% in 2010, .4% in 2009)

Q4 2008 GDP:-8.3% ( -8.9% in 2011 revision, -6.8% in 2010, -5.4% in 2009)

Q3 2008 GDP: -2.0% (-3.7% in 2011 revision, -4% in 2010, -2.7% in 2009)

Q2 2008 GDP: 2.0% (1.3% in 2011 revision, 0.6% in 2010, 1.5% in 2009)

  • Advance Report: - The economy grew 1.9%. Revisions for 2007 were also released: 2007 GDP grew 2% and Q4 GDP fell .2%.
  • Second Report - Growth for Q2 2008 was revised up to 3.3%, thanks to new data about increased exports and decreased imports.
  • Third Report - Released when the economy was in the grips of a credit crunch, the BEA's downward revision only fueled further pessimism.

Q1 2008 GDP: -2.7% (-1.8% in 2011 revision, -.7% in 2010, No prior revision)

  • Advance Report: - Why slow growth at .6%, though painful, meant the economy (could have) avoided a recession.
  • Second Report - Growth was revised up to .9%. Why it still felt like a recession, even though it technically wasn't.
  • Third Report - Growth was revised up to 1% thanks to exports.

©2014 About.com. All rights reserved.