If you read the news today, all you will see are headlines proclaiming that GDP contracted by 3.8% in 4Q08.  Here are some of the headlines I’ve found:

• “Q4 GDP down 3.8%, biggest drop since 1982″ – Yahoo.com
• “US GDP shrank 3.8% last quarter, most since 1982″ – Bloomberg
• “Economy: Sharpest decline in 26 years” – CnnMoney.com
• “Obama addresses new numbers showing shrinking U.S. economy, calls for Senate to back stimulus” – Foxnews.com
• “GDP shrinks as spending falls” – Wall Street Journal Online

The list goes on and you get the picture.  It just goes to show how negative the news media is today.  Not one of these news venues thought to highlight the fact that our 4Q08 GDP figure beat the economists estimates by 30%!  Can that be right?  Yep, the 79 of smartest minds in the dismal science projected that the US would contract in the 4th quarter by 5.5%.  In reality, we only contracted by 3.8% in 4Q08.  In the Bloomberg article, you have to go down 31 lines before they mention that we beat the forecast.

Another point that gets lost in the negativity is that the United States economy grew in 2008.  Let me say that again, the United States economy grew in 2008.  For 2008, the US GDP grew by 1.3%.  Now, that’s not a huge growth number and pales in comparison to China’s 8% growth, but it is still growth.  It’s like getting a smaller than expected raise.  Yes, it stings, but it is far better than getting a pay cut.  However, you have to go down to line 41 before the same Bloomberg article mentions the growth.  They then go on to explain what contributed to the growth – exports and the Bush administration’s tax rebates (although Bush is not mentioned by name).  So, people are still buying American products and tax cuts were effective at boosting GDP.  Those are two very interesting points as we ponder a $900 billion stimulus plan.

There is no doubt that the US economy is hurting.  However, consumer sentiment is largely to blame for the decrease in consumer spending.  If all consumers hear about is negative news, changing consumer sentiment will be a long, tedious process.  There are some that would argue that Washington wants to portray a doomsday scenario and instill fear into the American psyche so they can garner support for the stimulus bill.  Regardless of whether you subscribe to that theory, America needs a healthy shot of optimism and today’s economic numbers could help out.  However, you have to read through some doom and gloom to find anything positive.

Whatever your political persuasion, you have to admit that this would be a great feeling.  Dancing on the seal of the president of the United States, with the woman you love, only hours after being innaugurated as President.  For that one moment, does it get any better?

The Virginia Employment Commission announced yesterday the December 2008 employment figures.  Between November 2008 and December 2008, non-farm employment decreased by 25,900 jobs.  This decline brought the State unemployment rate to 5.2%, up from 4.6% in November 2008 and 3.2% in December 2007.  To paraphrase the words of William F. Mezger, Chief Economist for the VEC, the recession has caught up with Virginia.  There were, however, some bright spots in the release.

First, Virginia’s unemployment rate remains well below the December 2008 National unemployment rate of 7.2% – approximately 25% lower.  Second, many of the State’s MSAs are doing pretty well.  Danville, while having one of the highest unemployment rates in the State, did manage to add jobs and bring its unemployment rate down 20 basis points from November to 11.5%.  Several MSAs have unemployment rates less than 5%, including Charlottesville and Harrisonburg.  Northern Virginia, the state’s largest MSA, has the best unemployment rate at 3.9%, up from 3.5% in November 2008.

Finally, several sectors added jobs from November to December of 2008.  The trade and transportation sector added 3,600 workers.  Finance added 300 jobs and information added 100 jobs.  While these are not staggering numbers, or even as large as in previous years, they do represent an addition of jobs.  In an economy where “flat” is the new “good”, “up” is the new “great”.

Even with negotiations still underway to retain Maersk as a customer at the Port of Charleston, the shipping line announced that it will reroute some of its cargo away from Charleston.  Under a vessel-sharing agreement with CMA-CGM, Maersk will eliminate one weekly service call from Charleston and add that cargo to rival ports of Savannah and Virginia.  The loss is another major blow to Charleston in what is becoming a painful saga.  This latest move is a clear indication that Maersk is serious about leaving the Port of Charleston when its contract expires in 2010.

While the loss of Maersk will be difficult for the Port of Charleston to handle, I am afraid that it may be just the beginning.  When the largest shipping line in the world publicly announces that it can’t operate in your port because it is too expense relative to the competition, few other shipping lines will be beating down your door to sign up.  Where the big boys go, so goes the little guy.