Economy Shrinking - - Tyler, Longview, Jacksonville |ETX News

10/30/2008 News

Economy Shrinking

WASHINGTON (AP) - "We're positioned to bounce back."

That's the White House reaction to news that the economy shrank in the third quarter. In the strongest signal yet that the country is in recession, the Commerce Department report says the gross domestic product contracted at a 0.3 percent annual rate from July through September.

A big cut in consumer spending was a major factor. Consumers reduced spending at a 3.1% pace, the biggest cut since 1980. But the White House is downplaying the significance of the numbers. It says they were not unexpected and notes special circumstances, such as hurricanes and the strike at Boeing. Press secretary Dana Perino says while the country faces "serious challenges," it "remains the best place to do business."

Reaction in the stock market has also been positive. Traders had expected the news to be worse. The Dow was up as much as 225 points in the first hour. It's sunk back a bit since, but remains in positive territory.

Michael Thompson, 6pm News Producer.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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