Friday the U.S. Commerce Department released figures showing the nation’s Gross Domestic Product contracted at an annual rate of 1.1% in the third quarter, nearly triple the preliminary 0.4% rate reported last month.
This measure of total economic activity is the worst showing since the first quarter of 1991, when it shrank 2%.
With this news, and the “Beige Book” report from the Federal Reserve this week, which indicated further slowing of the economy, analysts are predicting that the Federal Reserve will cut interest rates again when it meets on Dec. 11.
About the only positive sign coming out of the GDP report was consumer spending, which has been credited with keeping the economy from declining further. It increased at an annual rate of 1.1 percent, just slightly below the 1.2 annual rate estimated a month ago. However, that is the smallest increase in eight years. Business investment in new plants and equipment decreased at annual rate of 9.3%. However, businesses made some progress in selling off unsold inventories during the quarter.
The Commerce Department will give its weigh-in on third quarter GDP numbers when it releases its final estimate on Dec. 21.