Economy likely suffered deeper contraction
source: http://apnews.myway.com/article/20090227/D96JT8B00.html
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WASHINGTON (AP) - The economy's downhill slide at the end of last year was likely much steeper than the government initially thought and it is probably doing just as poorly now - if not worse - as a relentless slew of negative forces feed on each other, pushing the country deeper into recession.
American consumers - spooked by vanishing jobs, sinking home values and shrinking investment portfolios have cut back. In turn, companies are slashing production and payrolls. Rising foreclosures are aggravating the already stricken housing market, hard-to-get credit has stymied business investment and is crimping the ability of some consumers to make big-ticket purchases.
It's creating a self-perpetuating vicious cycle that is causing the economy to deteriorate at a rapid pace. The country is suffering through the worst housing, credit and financial crises since the 1930s.
The Commerce Department is set to release a report Friday expected to show the economy contracted at a pace of 5.4 percent in the October-to-December quarter. If economists are correct, the updated reading on gross domestic product, or GDP, would show the economy sinking faster than the 3.8 percent annualized decline the government first estimated a month ago. GDP measures the value of all goods and services produced within the United States and is best barometer of the country's economic health.
American consumers - spooked by vanishing jobs, sinking home values and shrinking investment portfolios have cut back. In turn, companies are slashing production and payrolls. Rising foreclosures are aggravating the already stricken housing market, hard-to-get credit has stymied business investment and is crimping the ability of some consumers to make big-ticket purchases.
It's creating a self-perpetuating vicious cycle that is causing the economy to deteriorate at a rapid pace. The country is suffering through the worst housing, credit and financial crises since the 1930s.
The Commerce Department is set to release a report Friday expected to show the economy contracted at a pace of 5.4 percent in the October-to-December quarter. If economists are correct, the updated reading on gross domestic product, or GDP, would show the economy sinking faster than the 3.8 percent annualized decline the government first estimated a month ago. GDP measures the value of all goods and services produced within the United States and is best barometer of the country's economic health.
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