US GDP fall of 3.8% less than feared

By Simone Baribeau

Published: January 30 2009 14:37 | Last updated: January 30 2009 19:35

The US economy contracted by an annualised 3.8 per cent in the final quarter of 2008, according to advance estimates released on Friday, a much smaller percentage than expected but still its worst performance since 1982.

The decline, led by a build-up in inventories – which boosted GDP by 1.3 percentage points – offered little hope for an economic turnround, since production is likely to continue to slow as companies seek to draw down their stock.