Key US releases this morning continue to show that the current recession will is at least as bad as the recession of the early 1980s. GDP showed a smaller than expected decline but nonetheless the largest contraction since the recession of the early 1980s. Consumption has declined significantly in the past two quarters with a 3.5% and 3.8% for Q4 and Q3 respectively. The Core PCE came in weaker than expected but showed slight growth. The Chicago PMI dropped below the 34.9 expectation to 33.3, just below the lowest reading reached in 1999 following the collapse of the dotcom bubble. Consumer Confidence also proved weaker than expected at 61.2, economists had expected 61.9. The reading is well off the 55.3 low reached in September but is a stark reminder that conditions remain negative and further downside will continue well through much of 2009. No major reaction has been observed in currency markets following the releases although US Markets are visibly down with the Dow 30 showing a greater than 1% decline.
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