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The revised GDP report came out today and it showed 0.6% growth for the fourth quarter, which was the same as the initial report.

"The first quarter will be ugly," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. "The strength of exports is what would keep us out of a recession if we don't go into one."

The report, combined with figures today showing claims for unemployment insurance jumped last week, reinforced traders' expectations that the Federal Reserve will cut interest rates again. Investors see a 100 percent chance of at least a half- point reduction in the benchmark rate to 2.5 percent by the end of the next meeting on March 18. Odds of a three-quarter point cut rose to 36 percent, from 10 percent.

Fed Chairman Ben S. Bernanke, testifying to the Senate Banking Committee today, signaled he's ready to lower interest rates again to sustain the expansion.

The median estimate in a Bloomberg News survey of 74 economists was for a 0.8 percent increase in GDP.

This was one of the smallest revisions I'm aware of. The GDP number was revised lower by 0.0025%.

Here's a look at GDP growth based on a trailing three-quarter basis. I don't know why, but that often seems to be useful time frame.

Posted by edelfenbein at February 28, 2008 11:15 AM