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Q3 GDP down, consumer spending lowest since 1980

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No surprises, but hardly good data. Reuters:

The U.S. economy shrank at a 0.5 percent annual pace in the third quarter as expected after consumers and businesses cut spending and the country's recession gathered steam, government data showed on Tuesday.

The U.S. economy entered a recession last December which deepened after the failure of U.S. investment bank Lehman Brothers in September, which froze credit and sent households and firms into a defensive crouch.

"The past couple of quarters have been really weak and if anything, I'm afraid it may indicate a really bad fourth quarter," said Kurt Karl, chief U.S. economist at Swiss Re in New York.

The Commerce Department, in its final revision, said the decline in gross domestic product in the third quarter versus the previous three months was the steepest since the third quarter of 2001, in the aftermath of the September 11 attacks on the United States.

Analysts polled by Reuters had predicted the report would show GDP declined by an unrevised 0.5 percent in the third quarter after growing at a 2.8 percent pace in the previous three months, when tax rebates temporarily helped fuel demand.

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