U.S. economy worse than first estimated

The U.S. economy, measured by gross domestic product (GDP), contracted at a seasonally adjusted 0.5 percent annual rate in the third quarter, the Commerce Department reported Tuesday. Originally, the government had estimated third-quarter 2008 GDP fell 0.3 percent. Second-quarter 2008 GDP climbed 2.8 percent.

The revisions to real gross domestic product were largely due to weaker consumer spending. It was the weakest performance since a 1.4 percent contraction in third-quarter 2001 GDP.

GDP is a measure of all goods and services produced in the economy.

The data revisions showed third-quarter spending by consumers fell 3.7 percent, down from a previously estimated 3.1 percent decrease. The 3.7 percent decrease took 2.69 percentage points from GDP in the third quarter. Consumer spending accounts for about 70 percent of economic activity.