Ouch. Before the November release I had Q4 2008 coming in at around -2.4%. I think that forecast is probably still going to be about in line with the actual Q4, though maybe more reflective of the low-end of a range of -2.4% to -3.0%.
I was surprised by the better than expected Q4 GDP in the US (if you can put a positive spin on the biggest contraction since 1982). Real GDP came in at -3.8% vs expectations of -5.8%. Barry Ritholtz points out that much of the upside surprise came from higher than expected inventories. Higher inventories in Q4 should mean production cuts shifting into 2009 and therefore even weaker growth in Q1.
Not good times - bad times.
I'm hoping to post a revised Canadian forecast later today to reflect the released budget and incoming Q4 data. Stay tuned.
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