Economy shrinks as consumers cut back on spending (Game "keeper")

[shotten99]

Ayers who?
9 mins ago

WASHINGTON – A day after the Federal Reserve slashed a key interest rate to battle an economic downturn, the government reported Thursday the economy did shrink in the summer, sending the strongest signal yet that a recession may have already begun.

The Commerce Department reported that the gross domestic product, the broadest measure of economic health, fell at an annual rate of 0.3 percent in the July-September period, a significant slowdown after growth of 2.8 percent in the prior quarter.

The spring activity had been boosted by the $168 billion economic stimulus program, but the economy ran into a wall in the summer as the mass mailings of stimulus checks ended and consumer confidence was shaken by the upheavals on global markets. Consumer spending, which accounts for two-thirds of the economy, dropped by the largest amount in 28 years in the third quarter.

The classic definition of a recession is two consecutive quarters of negative GDP. Many analysts believe the GDP will decline in the current October-December period by an even larger amount and they are forecasting a negative GDP figure in the first three months of next year.

The National Burea of Economic Research, which is the official arbiter of recessions in this country, has not said when it will make its determination of whether the country has entered a recession.

Meanwhile, the Labor Department reported Thursday that applications for unemployment benefits remained at an elevated level last week, another sign of the economy's struggles. The number of laid-off workers filing new claims totaled 479,000, the same as the previous week, disappointing analysts who had expected a small drop.

http://news.yahoo.com/s/ap/financial_meltdown/print

[mrcheerful]

1. Well gee wiz Wally who would have thunk that with gas/electric and food costs

going sky high that American's wouldn't still use their credit cards for shopping spree's for toys? Freaking economists and republicons have to be the dumbest educated people out there. What they didn't take economics 101? You know, jobs = production = lower costs to consumers = more products consumed = more profits = more workers = more products = more profits = higher wages = more products consumed. Seems these masters of economics never learned that nor did republicons. Tax breaks = less need for production = low wages + lay off of workers = less consumption. Hell I only have a high school education and I know this crap.

[malaise]

2. And AMEX announced this morning that

they are laying off(what an asinine euphemism)i.e. firing 7,000 workers.