The US economy shrank less than expected in the third quarter but still suffered the biggest contraction since the 2001 recession, reports Bloomberg. The gross domestic product fell 0.3%, led by the first fall off of consumer spending in two decades. The figure, out from the Commerce Department this morning, beat the forecast 0.5% annual rate but nevertheless rang alarm bells among economists who warned a prolonged recession is likely.
“The fourth quarter is going to be much worse as the crescendo of financial disruption reached a high point this month,” said one economist. Consumer spending was off 3.1%, more than expected and the most since 1980, reports the Wall Street Journal. Durable goods purchases were off 14.1%, and housing investment plunged 19.1%. "The crisis really kicked up in late September," said an analyst.