The US economy shrank at an annual rate of 0.3% in the third quarter. This fall is sharpest contraction in seven years and a clearly indicates that the world’s largest economy is in recession.

The commerce department said the third-quarter contraction in gross domestic product was the steepest since the corresponding quarter in 2001 though it was slightly less than the 0.5% reduction Wall Street economists had forecast. The third-quarter contraction was a striking turnaround from the previous quarter’s 2.8% rate of growth.

Consumer spending, which fuels two-thirds of US economic growth, fell by 3.1%, the first fall after 1991. Neither the recession of 2001 nor the slow income growth of the years that followed could keep households from increasing consumption.

News Source: Times Of India