U.S. GDP falls 0.3 percent

WASHINGTON, Oct. 30 (UPI) -- The U.S. economy shrank in the third quarter, falling at an annual rate of 0.3 percent, possibly indicating a recession has begun, the government said.

The figure was slightly less than the consensus estimate of 0.5 percent contraction in the gross domestic product but marked a distinct turn around from the previous quarter's growth of 2.8 percent.

The Bureau of Economic Analysis said the contraction was pushed by shrinking contributions in consumer spending and declining residential and nonresidential investments.

In the quarter, export growth slowed, while imports registered a smaller decrease than in the second quarter.

While emphasizing the initial GDP report is an advanced estimate, "most of the major components contributed to the downturn," the report said.

Inflation also picked up in the third quarter with the prices paid for gross domestic purchases rising 4.8 percent compared with a second quarter increase of 4.2 percent.

Personal spending decreased sharply, down 3.1 percent after an increase of 1.2 percent in the second quarter, the report said.

Service expenditures increased 0.6 percent but spending on durable goods dropped sharply, down 14.1 percent, while spending on non-durable goods dropped 6.4 percent.