US ECONOMY SHRINKS AT FASTEST RATE SINCE 1982

The US economy shrank in the fourth quarter at its fastest rate since 1982, revised official figures showed yesterday, as corporate profits fell at the sharpest pace in 55 years and jobless claims continued to climb.

Updated commerce department data showed US gross domestic product contracting at an annualised rate of 6.3 per cent in the fourth quarter of last year, compared with last month's estimate of 6.2 per cent. That previous 26-year record came after an overly optimistic January projection that the economy contracted by just 3.8 per cent in spite of anecdotal evidence of a more severe downturn.

The final GDP figures were expected to show a contraction of 6.6 per cent, but the results signal that a deeper contraction could be coming this quarter. The revision was due to a draw-down of inventories and a slowing of construction and exported services. The downgrade was blunted by reduced imports, an uptick in exports and an infusion of government spending.