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US recession was deeper than thought

Friday, July 30 14:06:40

The U.S. economic recession was more severe than previously estimated, the US government said in a series of data revisions that also showed growth at the end of last year was weaker than previously thought.

Benchmark revisions issued by the Commerce Department showed gross domestic product contracted 2.6 percent last year and the economy did not grow at all in 2008. It had previously estimated output fell 2.4 percent in 2009 after expanding 0.4 percent the prior year.

The department said the revisions, which reflected comprehensive data, did not dramatically change the picture of economic activity. The economy slipped into recession in December 2007, but resumed growth in the second half of 2009.

The downturn was the longest and deepest since the 1930s.

The department trimmed its growth estimate for the fourth quarter of last year to a 5.0 percent annual pace from its previous estimate of 5.6 percent.

The revisions to the full year estimates mostly reflected downward adjustments to consumer spending and residential construction. The saving rate, which climbed during the recession as fearful households slashed spending, was revised to 5.9 percent from 4.2 percent in 2009. (C ) Reuters