US Economic Meltdown: Economy flashes recession signal; GDP down at 0.3% rate
The government says the economy shrank in the third quarter as consumers cut back spending by the biggest amount in 28 years. It was the strongest signal yet the country is facing recession. The broadest barometer of the nation's economic health, gross domestic product, shrank at a 0.3% annual rate in the July-September quarter, the Commerce Department said. It marked the worst showing since the economy contracted at a 1.4% pace in third quarter 2001, when the nation was suffering through its last recession.The deterioration reflects a sharp retrenchment by consumers, whose spending accounts for the largest chunk of national economic activity. Consumers ratcheted back their spending at a 3.1% annual rate in the third quarter, the most since second quarter 1980, when the country was in the grip of recession.
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