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US economic output falls sharply | US economic output falls sharply |
(20 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 sign of the worsening US recession comes as President Obama's stimulus plan passes 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. |
During 2008 as a whole, the US economy grew just 1.3%, down from 2% in 2007, and the slowest growth since 2001, the Commerce Department said. | During 2008 as a whole, the US economy grew just 1.3%, down from 2% in 2007, and the slowest growth since 2001, the Commerce Department said. |
Grim reading | 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. |
This is a much more severe global downturn that had been anticipated Scott Brown, Raymond James & Associates | This is a much more severe global downturn that had been anticipated Scott Brown, Raymond James & Associates |
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. | 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. |
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. | 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. |
The amount spent on food and clothing dropped 7.1%, the steepest quarterly decline since 1950. Overall consumer spending was down 3.5%. | The amount spent on food and clothing dropped 7.1%, the steepest quarterly decline since 1950. Overall consumer spending was down 3.5%. |
Overall exports fell by 19.7%. | Overall exports fell by 19.7%. |
Meanwhile, business equipment and software spending was down 27.8%, with spending by homebuilders down by 23.65%. | 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". |
Fellow analyst Scott Brown, chief economist at Raymond James & Associates agreed, saying the details "were pretty terrible". | Fellow analyst Scott Brown, chief economist at Raymond James & Associates agreed, saying the details "were pretty terrible". |
"This is a much more severe global downturn that had been anticipated," said Mr Brown. | "This is a much more severe global downturn that had been anticipated," said Mr Brown. |
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 | 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. | 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. | 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. | 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". | 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". |