A White House spokesman says the U.S. economy got significantly
weaker during October, November and December, because of the credit
crisis and turmoil on the U.S. stock markets.
Tony Fratto's comments Tuesday indicate that the U.S. gross domestic
product got smaller for two consecutive quarters, which is the classic
definition of a recession found in most textbooks.
The GDP adds up all the goods and services produced in the nation, and is an important measure of the economy's health.
Before Fratto spoke, the government published newly revised figures
showing that the U.S. gross domestic product declined by a half-percent
in the third quarter (July, August and September). The new figures are in line with previous estimates.
But a different report says U.S. consumers grew less pessimistic in
December, as energy prices fell and retailers battered by recession
offered deep discounts on merchandise.
Efforts to ease the economic crisis are moving forward, and Vice
President-elect Joe Biden says the incoming Obama administration and
members of Congress are close to agreement on an economic stimulus
package. The program is intended to boost the economy with government
spending on roads, mass transit, and a tax cut for the middle class.
The financial crisis is hurting automakers around the world. A
spokesman for Japanese auto giant Toyota tells Bloomberg news that
layoffs at its U.S. plants cannot be ruled out. And South Korea's top
two automakers say they have slashed their sales forecasts by 12
The economic downturn started with problems in the U.S. housing market, and a new report Friday said prices are still falling.
An industry group (the National Association of Realtors) showed the prices of both new and previously owned homes fell by record amounts (of more than 13 percent) in November from the same period a year earlier.
And the economic crisis is hitting many nations besides the United
States. For example, British officials say their country's economy is
shrinking faster than they first thought. The country's GDP fell
six-tenths of a percent in the third quarter -- the biggest drop in 18