Economy shrinks in third quarter as consumers retreat - Reuters

WASHINGTON (Reuters) - The U.S. economy suffered its sharpest contraction in seven years in the third quarter as consumers cut spending and businesses reduced investment at the onset of what may be a severe and long-lasting recession.

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The Commerce Department said on Thursday that U.S. gross domestic product shrank at a 0.3 percent annual rate as the sharpest pullback by consumers since 1980 overwhelmed an increase in government spending. "This is just the beginning of contraction," said Sung Won Sohn, an economics professor at California State University, who said the fourth quarter will certainly show another decline, which would meet the traditional definition of recession, or back-to-back quarters of falling activity.

Full Story: Economy shrinks in third quarter as consumers retreat - Reuters