<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>February 27, 2009, 9.38 pm (Singapore time)
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>US economy shrank at 6.2% rate in Q4
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WASHINGTON - The US economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession.
The Commerce Department said gross domestic product, which measures the total output of goods and services within US borders, fell at an annual rate of 6.2 per cent in the October-December quarter, the deepest slide since the first quarter of 1982. The government last month estimated the drop in fourth-quarter GDP at 3.8 per cent.
The weaker GDP estimate reflected downward revisions to inventories and exports by the department.
The decline was worse than analysts' expectations for a 5.4 per cent contraction in fourth-quarter GDP. The economy expanded 1.1 per cent in 2008, the slowest pace since 2001, the department said.
Consumer spending, which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 per cent rate, the biggest fall since the second quarter of 1980, as household wealth plunged. That compared with a 3.5 per cent fall estimated last month.
Exports, until recently one of the few pillars supporting the distressed economy, tumbled at a 23.6 per cent annual rate, the steepest plunge since 1971. That was revised from the 19.7 per cent drop estimated in last month's report.
Inventories, which minimised the fall in GDP last month after being estimated up a surprising US$6.2 billion, were revised to show a US$19.9 billion decline in the fourth quarter.
Business investment fell at a 21.1 per cent rate, the largest drop since 1975, from a previously estimated 19.1 per cent. Residential investment fell 22.2 per cent in the fourth quarter.
The deteriorating economy is dampening inflation pressures, with the personal consumption expenditures price index diving a record 5 per cent. Excluding food and energy, prices rose 0.8 per cent in the fourth quarter, the smallest advance since a matching increase in 1997. -- REUTERS
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>US economy shrank at 6.2% rate in Q4
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>WASHINGTON - The US economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession.
The Commerce Department said gross domestic product, which measures the total output of goods and services within US borders, fell at an annual rate of 6.2 per cent in the October-December quarter, the deepest slide since the first quarter of 1982. The government last month estimated the drop in fourth-quarter GDP at 3.8 per cent.
The weaker GDP estimate reflected downward revisions to inventories and exports by the department.
The decline was worse than analysts' expectations for a 5.4 per cent contraction in fourth-quarter GDP. The economy expanded 1.1 per cent in 2008, the slowest pace since 2001, the department said.
Consumer spending, which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 per cent rate, the biggest fall since the second quarter of 1980, as household wealth plunged. That compared with a 3.5 per cent fall estimated last month.
Exports, until recently one of the few pillars supporting the distressed economy, tumbled at a 23.6 per cent annual rate, the steepest plunge since 1971. That was revised from the 19.7 per cent drop estimated in last month's report.
Inventories, which minimised the fall in GDP last month after being estimated up a surprising US$6.2 billion, were revised to show a US$19.9 billion decline in the fourth quarter.
Business investment fell at a 21.1 per cent rate, the largest drop since 1975, from a previously estimated 19.1 per cent. Residential investment fell 22.2 per cent in the fourth quarter.
The deteriorating economy is dampening inflation pressures, with the personal consumption expenditures price index diving a record 5 per cent. Excluding food and energy, prices rose 0.8 per cent in the fourth quarter, the smallest advance since a matching increase in 1997. -- REUTERS
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