Going forward, this trend is likely to drop even more if some of the positive elements in 3Q08 fade away. These trends reflect the weak environment faced by households job losses, declining wealth, low real income gains and particularly during 3Q08, substantial increase in energy prices. In fact, gasoline spending reached 4. 6 of total PCE, the highest share since 3Q83. 3Q08 GDP figures are in line with our base scenario which assumes significant correction in PCE and slowdown in both nonresidential investment and exports. In addition, food purchases dropped 8.

This reflected sharp and broad base decline in PCE 3. 1, the largest in years. GDP growth in 4Q08 is likely to continue in although the magnitude of the downturn depends heavily on the extent and duration of the financial crisis and could be partially mitigated by the recent decline in energy prices and the possibility of another fiscal stimulus package, which could help to absorb some negative pressures.. These trends reflect the weak environment faced by households job losses, declining wealth, low real income gains and particularly during 3Q08, substantial increase in energy prices.

In fact, gasoline spending reached 4. 6 of total PCE, the highest share since 3Q83. 3Q08 GDP figures are in line with our base scenario which assumes significant correction in PCE and slowdown in both nonresidential investment and exports. This reflected sharp and broad base decline in PCE 3. 1, the largest in years. These trends reflect the weak environment faced by households job losses, declining wealth, low real income gains and particularly during 3Q08, substantial increase in energy prices.