by Colin Lovett, PICurrent Managing Producer
So, you’ve seen the latest about the shrinking economy. The U.S. Commerce Department says the Gross Domestic Product (GDP) fell 0.3% for the third quarter of this year (July-September). It’s the biggest drop since the recession of 2001.
But the strange part? Things are so bad that Wall Street is apparently relieved the decline wasn’t bigger.
GDP – No, not a horror movie monster (“Attack of the Gross Domestic Product”). The GDP is basically a measure of our national income. It is how much we make and how many goods or services we create. If we measured the GDP for a single family, is would measure how much they made from jobs and investments minus how much they spent to stay afloat. A declining GDP means they earned less, borrowed more or a combination of the two.
Since this is happening to so many people in real life, it’s easy to understand why our national GDP is going down. People are losing their jobs and are cutting back on how much they spend. Many are going into debt to keep paying the bills. When this happens to enough people, it can hurt the entire economy.
Like I said, the good news is that many economists are happy the decline was not bigger. The bad news is that most of the third quarter came before the financial meltdown, which started in mid-September. The guys at Economic Data have some nice charts of our economic decline.
Last week we had a series to help you take charge of your financial future. You can find them here:
For more on the drop in the GDP, please visit:
