Reply #6: Economy likely suffered deeper contraction

[ozymandius]

WASHINGTON – The economy's downhill slide at the end of last year was likely much steeper than the government initially thought and it is probably doing just as poorly now — if not worse — as a relentless slew of negative forces feed on each other, pushing the country deeper into recession.

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The Commerce Department is set to release a report Friday expected to show the economy contracted at a pace of 5.4 percent in the October-to-December quarter. If economists are correct, the updated reading on gross domestic product, or GDP, would show the economy sinking faster than the 3.8 percent annualized decline the government first estimated a month ago. GDP measures the value of all goods and services produced within the United States and is best barometer of the country's economic health.

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Looking ahead to the current January-to-March quarter, economists believe it is also shaping up to be quite weak, with many projecting an annualized drop of 5 percent. Given the dismal state of the jobs market, some economists believe an even sharper decline in first-quarter GDP is possible.

http://news.yahoo.com/s/ap/20090227/ap_on_bi_ge/economy