The US economy shrank at a 0.4 per cent rate between July and September, a decline that could signal that the country is in recession.
The drop in the gross domestic product – the total output of goods and services produced in the country – was the biggest since the first quarter of 1991 when the country was in the depths of the last recession, the Commerce Department reported today.
The weak performance reflected a sharp drop in consumer spending, which slowed to the weakest pace in more than eight years, and a continued plunge in investment by businesses in new plants and equipment.
Traditionally, a recession is defined as two consecutive quarters of declining GDP. However, the actual dating of a downturn is done by the National Bureau of Economic Research and is based on when a number of economic indicators in addition to the GDP turn negative.
Many analysts believe that the country had entered into a recession even before the 11 September attacks and when the NBER gets around to establishing the official date it will mark the downturn as beginning last April or May.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies