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U.S. Economy Heads Into a Recession as GDP Contracts 0.3%
Thursday, 30 October 2008 12:30:35 GMT  |  David Song, Currency Analyst
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The advanced GDP reading for the U.S. showed that the economy contracted 0.3% in the third quarter to record its biggest quarterly decline since 2001. The growth figure crossed the wires slightly better than the -0.5% estimate projected by economists, but the breakdown of the report suggests that conditions may only get worse as exports cooled to 5.9% from 12.3% in the second quarter. In addition, personal consumption slipped to -3.1% from 1.2% in the previous quarter as durable goods plunged 14.1%, followed by a 6.4% decline in non-durable goods. The data suggests that the world’s largest economy is headed for a recession, which could force the Fed to lower the benchmark interest below the 1.00% level for the first time in history.

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