Economy shrinks at 3.8% pace, worst since '82

Economy shrinks at 3.8% pace, worst since '82

WASHINGTON - The economy shrank at a 3.8 percent pace at the end of 2008, the worst showing in a quarter-century, as the deepening recession forced consumers and businesses to throttle back spending.

Although the initial result was better than economists expected, the figure is likely to be revised even lower in the months ahead and some believe the economy is contracting in the current quarter at an even faster pace.

The new figure, released Friday by the Commerce Department, showed the economy sinking at a much faster clip in the October-December period than the 0.5 percent decline logged in prior quarter. Economists had forecast an even worse fourth-quarter performance — a staggering 5.4 percent rate of decline — but the results were still grim.


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