WASHINGTON (AP) - The government says the economy shrank in the third quarter as consumers cut back on their spending by the biggest amount in 28 years. It was the strongest signal yet the country has hurtled into recession.
However, it was less than analysts expected. They had predicted a drop of about 0.5 percent in the GDP, which is a measure of all goods and services provided within the U.S..
The broadest barometer of the nation's economic health, gross domestic product, shrank at a 0.3 percent annual rate in the July-September quarter, the Commerce Department said.
It marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.
Investors seem poised to react positively to this news as Dow futures are up 3.6% or 320 points.
(Copyright 2008 by The Associated Press. All Rights Reserved.)