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The economy registered a contraction of 3.8% at the end of 2008, the highest in a quarter century, as the recession forced consumers and businesses to reduce spending, the government reported Friday.

The Commerce Department report indicated that the rate in October-December by far surpassed the 0.5% recorded in the previous quarter.


While economists forecast a further contraction of 5.4%, the results did not fail to reflect the impact of mortgage crisis, credit and financial.

The contraction of 3.8% annual pace was the worst since the 6.4% in the first quarter of 1982, when the country suffered a severe recession.


In 2008, the economy grew just 1.3%, compared to 2% in 2007, the slowest expansion since the last recession in 2001.

To revive the economy, the president Barack Obama and Democratic lawmakers devised a program of 819,000 million dollars, approved on Wednesday by the House of Representatives, which must be investigated now _ _ certainly changed in the Senate.


The White House predicted the bad news. The previous day, press secretary Robert Gibbs said that the results of the fourth quarter would be "materially adverse."

The GDP is the sum of all goods and services produced within a country, and is considered the most accurate barometer of economic health.


The fourth quarter was the weakest of 2008 and the contraction of 3.8% will increase further once the government finishes analyzing the statistics. The economy remains in a state of weakness in most of this year, analysts predicted, and some believe that the contraction in the first quarter is 4% or more.

Consumers reduced their spending by 3.5% in late 2008, after a 3.8% in the third quarter. The last time I did it in two consecutive quarters was in late 1990 and early 1991.


In the fourth quarter of 2008, Americans reduced their spending especially on durable goods, those high prices and a lifespan of at least three years, including automobiles, appliances and furniture. Spending on durable goods fell to annual rate of 22.4%, the largest since 1987.

A reduction of 7.1% annually in the cost of goods "not sustainable" as food and clothing was the highest since 1950.


The new frugality of Americans was patentizada on increasing savings, which rose to 2.9% in the fourth quarter, compared to 1.2% in the third.