Third-Quarter GDP Falls 0.5%

The U.S. economy contracted more than previously estimated, shrinking by 0.5% in the third quarter, the Commerce Department said Tuesday.

The contraction in the gross domestic product — the biggest downturn since 2001 recession — followed a 2.8% growth rate in the second quarter.

Commerce last month estimated a 0.3% contraction, and the 0.5% downturn matched economists’ estimates, Bloomberg reported.

Consumer spending, the biggest part of the economy, fell at a revised 3.7% annual rate, a bigger drop than the 3.1% estimated last month. It marked the first decline since 1991 and the biggest downturn since 1980.

The GDP figure was the second of three to be released by Commerce.

Recession is generally defined as two consecutive quarters of negative growth, but the National Bureau of Economic Research has yet to call a recession, Bloomberg said.