AP reported that the recession inflicted even more damage on the US economy in 2008 than the government had previously thought.

US Commerce Department, in revisions issued that date back to the Great Depression, now estimates that the economy grew just 0.4% in 2008. That's much weaker than the 1.1% growth the government had earlier calculated.

Behind the downgrade are several factors like consumers cut spending 0.2% in 2008 as compared with a 0.2% increase previously reported. And the housing market sank further in 2008 than was thought. Builders slashed spending 22.9%, more than the 20.8% cut previously estimated.

Economic activity in the first quarter of last year turned out to be negative. It dipped at a rate of 0.7%. That was in contrast to the 0.9% growth previously estimated. The economy grew in the second quarter, but less than was thought. And for the third quarter, the drop in economic activity was deeper than previously estimated.

About every five years, the government issues sweeping revisions to past estimates of gross domestic product, or GDP. The GDP, which measures the value of all goods and services produced in the United States, is considered the best barometer of the country’s economic standing. The latest revisions reach back to 1929. They are based on more complete information, as well as changes to methodology intended to more accurately gauge the nation’s economy.

(Sourced from Associated Press)