Third-Quarter GDP Shows 0.3% Contraction

The U.S. economy showed a 0.3% contraction in the third quarter, the Commerce Department said Thursday.

The contraction in the gross domestic product — the biggest downturn since the third quarter of 2001 — followed a 2.8% growth rate in the second quarter, Commerce said.
 
Economists had forecast a 0.5% contraction for the quarter, Bloomberg reported.

Consumer spending, the biggest part of the economy, fell at a 3.1% annual rate, the first decline since 1991 and the biggest since 1980.

Cutbacks in investments in business equipment and less spending on residential construction projects also contributed to the drop, Bloomberg reported.