U.S. Economic Shrinkage Worst in 25 Years
Posted on Feb 27, 2009
Either the U.S. economy was in the pool during the last three months of 2008 or the economic crisis is worse than expected. The nation’s GDP shrank 6.25 percent in the fourth quarter of last year, almost doubling the preceding quarter’s contraction rate of 3.8 percent.
The US economy contracted at the worst pace in 25 years in the last three months of 2008, as nervous businesses and consumers spent less money and exports declined.
Markets dropped on the economic news. On the New York stock exchange, the Dow Jones industrial average of blue chip stocks plunged more than 100 points in the first hour of trading, to 7,049, the lowest level since October 1997.
The US gross domestic product contracted at a frightening 6.25%, a rate much higher than the 3.8% decline in the third quarter of 2008, according to preliminary statistics released today [Friday] by the US department of commerce.
In a famous scene from “Seinfeld,” George Costanza (played by Jason Alexander) also experienced unexpected shrinkage.