Economy shrinks at worst pace in 25 years. GDP down 6.2 percent in 4th quarter 2008

Economy shrinks at worst pace in 25 years
Economy shrinks at faster-than-expected 6.2 percent pace in fourth quarter, worst in 25 years

Friday February 27, 8:35 am ET By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) -- The government says the economy shrank at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century. Consumers and businesses ratcheted back spending, plunging the country deeper into recession. The Commerce Department figure shows the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated by the government last month.
It also was a considerably weaker performance than the 5.4 percent annualized decline economists expected
The faster downhill slide in the final quarter of last year came as the financial crisis -- the worst since the 1930s -- intensified.
Consumers at the end of the year slashed spending by the most in 28 years. They chopped spending on cars, furniture, appliances, clothes and other things. Businesses retrenched sharply, too, dropping the ax on equipment and software, home building and commercial construction..