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US economic output falls sharply US economic output falls sharply
(10 minutes later)
US economic output fell 3.8% in the last three months of 2008, the worst quarterly contraction in more than 26 years, official figures have shown.US economic output fell 3.8% in the last three months of 2008, the worst quarterly contraction in more than 26 years, official figures have shown.
Much steeper than the 0.5% fall between August and October, it is also the first time the US has seen consecutive quarterly economic declines since 1991.Much steeper than the 0.5% fall between August and October, it is also the first time the US has seen consecutive quarterly economic declines since 1991.
The latest Commerce Department figures come as President Obama's stimulus package is passing through Congress.The latest Commerce Department figures come as President Obama's stimulus package is passing through Congress.
More US workers lost their jobs in 2008 than any year since World War II.More US workers lost their jobs in 2008 than any year since World War II.
Weak 2008 growth During 2008, the US economy grew just 1.3%, down from 2% in 2007, and the slowest growth since 2001, the Commerce Department said.
Grim reading
The performance of the US economy between October and December was the worst since the first quarter of 1982.The performance of the US economy between October and December was the worst since the first quarter of 1982.
Although the 3.8% decline was not as bad as the 5.4% drop expected by the markets, analysts said it still made grim reading. Although the 3.8% decline was not as bad as the 5.4% drop expected by the markets, analysts said the report still made grim reading.
The figures also showed that spending on durable goods such as cars, furniture and domestic appliances plunged 22.4% during the quarter. Spending on durable goods such as cars, furniture and domestic appliances plunged 22.4% during the quarter, the biggest drop in this figure since 1987.
Highlighting the continuing difficulties faced by US carmakers, this was the biggest drop in the durables number since 1987. Spending on food and clothing dropped 7.1%, the steepest quarterly decline since 1950. Overall consumer spending was down 3.5%.
Sales of food and clothing were 7.1% lower, the steepest quarterly decline since 1950. Overall consumer spending was down 3.5%. Overall exports fell by 19.7%.
Meanwhile, business equipment and software spending was down 27.8%, and exports were 19.7% lower. Meanwhile, business equipment and software spending was down 27.8%, with spending by homebuilders down by 23.65%.
Nigel Gault, chief US economist at Global Insight, said the figures "did not look healthy".Nigel Gault, chief US economist at Global Insight, said the figures "did not look healthy".
For all of 2008, the Commerce Department said the US economy grew just 1.3%, down from 2% in 2007, and the slowest growth since 2001.
Last month, the National Bureau of Economic Research, the country's business cycle dating committee, said the US entered the current recession in December 2007.Last month, the National Bureau of Economic Research, the country's business cycle dating committee, said the US entered the current recession in December 2007.
Stimulus package
President Barack Obama's $819bn (£572bn) economic stimulus package passed through the House of Representatives on Thursday by a vote of 244 to 188.
No Republicans backed the plan, saying it was too expensive and would not work.
The Senate debates the plan next week, and it could face stiff opposition as the Democrats have a slimmer majority in the upper chamber.
After Thursday's vote, President Obama urged members of Congress not to "drag our feet or allow the same partisan differences to get in our way".