More Videos
- Smallest US Businesses Borrowing Again: PayNet
- Wave of Debt Payments Facing US Government
- US Job Losses to Bottom out Next Quarter: NABE
- Little Sign of Inflation on the Horizon: IMF
- Kraft Weighs Higher Cadbury Bid as Rivals Circle
- MBS Program Should be Extended: Fed's Bullard
- Warren Buffett, Bill Gates 'Walk & Talk' At Columbia
- Microsoft, News Corp Weigh Online News Pact
- Senate Democrats at Odds Over Health Care Bill
- CNBC VIDEO: Warren Buffett & Bill Gates 'Walk & Talk' at Columbia University
- U.S. Stocks Slip, Dollar Rises
- How Stock Investors Can Play Holiday Travel
- Time Lapse World Series Is A Great Play
- Hirschhorn: Greed...or Fear
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- May Day For Dendreon
- 100% Mortgage Financing From USDA
MOST SHARED
- Wall Street Finds Profits by Reducing Mortgages
- CNBC VIDEO: Warren Buffett & Bill Gates 'Walk & Talk' at Columbia University
- What if a Recovery Is All in Your Head?
- Kraft Weighs Higher Cadbury Bid as Rivals Circle
- China Industrial Bank Eyes $2.64 Billion Rights Issue
- China Should Stop Property Stimulus Now: Central Bank
Text Size 
 |
The U.S. 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 U.S. borders, fell at an annual rate of 6.2 percent 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 percent.
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 percent contraction in fourth-quarter GDP. The economy expanded 1.1 percent 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 percent rate, the biggest fall since the second quarter of 1980, as household wealth plunged. That compared with a 3.5 percent fall estimated last month.
Exports, until recently one of the few pillars supporting the distressed economy, tumbled at a 23.6 percent annual rate, the steepest plunge since 1971. That was revised from the 19.7 percent drop estimated in last month's report.
Inventories, which minimized the fall in GDP last month after being estimated up a surprising $6.2 billion, were revised to show a $19.9 billion decline in the fourth quarter.
Business investment fell at a 21.1 percent rate, the largest drop since 1975, from a previously estimated 19.1 percent. Residential investment fell 22.2 percent in the fourth quarter.
The deteriorating economy is dampening inflation pressures, with the personal consumption expenditures price index diving a record 5 percent. Excluding food and energy, prices rose 0.8 percent in the fourth quarter, the smallest advance since a matching increase in 1997.
Print
Email
- Technology can make or break a fortune in the world of alternative energy.
- The Victoria's Secret Fashion Show attracts a big TV audience every year, but this year it may take on even more importance.
- Many people are facing the holidays with substantially smaller incomes. Here’s how some are adapting.
- Jim Cramer is a proponent of stocks that pay healthy dividends, and here are his top five dividend plays.
- The homebuyer's tax credit jacked sales for a while, but 2010 is looking weak. Now what?
- CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.
Data is a real-time snapshot *Data is delayed at least 15 minutes