US heads for deepening recession as economy slows further
Official figures from the Commerce Department have revealed that the world’s largest economy contracted at its sharpest rate in over 26 years in the last three months of 2008.
The figures show that US economic output plummeted 3.8%, the worst quarterly contraction since 1982, when output fell by 6.4%. While the figure was not as bad as analysts had expected, analyst Scott Brown, chief economist at Raymond James & Associates described the figures as ’pretty terrible‘.
Mr Brown added that the global downturn is much more severe than had been anticipated.
Meanwhile the Commerce Department said for the 2008 year, the US economy grew just 1.3%, down from 2% in 2007.
Furthermore, it was revealed that more workers in the US lost their jobs in the 2008 year than any year since the second World War.
Yesterday, the Commerce Department revealed that new home sales fell by 14.7% last month.
Further bad news also came from the Commerce Department yesterday who said that orders for long-lasting goods fell 2.6% in December – the fifth consecutive monthly fall.
Meanwhile, factory orders for the full 2008 year declined by 5.7%, while the fall in November was revised down to 3.7%.
President Barack Obama’s $819 billion (£572 billion) economic stimulus package was approved yesterday by the US House of Representatives.
It is hoped that the package will save or create 4 million jobs.