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Economy's Tumble Worse Than Expected

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The Associated Press

Published: November 26, 2008

WASHINGTON - The economy took a tumble in the summer that was worse than first thought as American consumers throttled back their spending by the most in 28 years, further proof the country is almost certainly in the throes of a painful recession.

The updated reading on the economy's performance, released Tuesday by the Commerce Department, showed the gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter.

That was weaker than the 0.3 percent rate of decline first estimated a month ago, and marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.

The GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the country's economic fitness.

Elsewhere, the New York-based Conference Board said its Consumer Confidence Index for November rose to 44.9, from a revised 38.8 in October. Last month's reading was the lowest since the research group started tracking the index in 1967 and Americans' views on the economy remain the gloomiest in decades as they grapple with layoffs, slumping home prices and dwindling retirement funds.

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