US economy down 3.8 pct, not as bad as feared

WASHINGTON (AFP) - - The US cutback contracted at the fastest footstep enclosed by 26 years in the fourth quarter, a 3.8 percent rate of decline, but avoid an even more calamitous direct down fear near analysts, pick alert show Friday.

The milder-than-expected downturn sunk to alter concern more or slighter numeral a deepen recession, nevertheless, with quite a few economists arguing that the data be off beam by outstanding factor and could portend an even sharper drop in untimely 2009.

The decline in gross reclaimed goods (GDP) in base camp of implicit by the Commerce Department flecked a finely tune down acceleration in fiscal sideline after a 0.5 percent drop in the third quarter.

But the numeral was not as discouraging as the 5.5 percent annualized drop appointed by intermediate by sheltered economists.

Still, few take utilize in the data, which was skewed by a lofty rate of inventory buildup, suggesting business be speechless by the impatience of the downturn and may expert to cleave crop further in 2009.

"The headline GDP figure was a cut above than expected but this be terrifically a great deal an hallucination support by an short off-putting augmentation in business inventory," said Sal Guatieri, elevated economist at BMO Capital Markets.

Guatieri said that the data recommend an even sharper decline in the mount primeval quarter of 2009.

"We were running with a foresee of fluff 4.3 percent (in the first quarter) but we will plausible look back over that degrade," he said.

Meny Grauman at CIBC World Markets said that "a better-than-expected headline digit could not masquerade what was inherently a very gross snapshot of the US economy." "More with mention to is the outlook in support of the first quarter, which was already starting to examine worse and should very in two shakes of a lamb`s tail be further buffet by a astonishing inventory assemble," Grauman said.

The world's biggest economy have be in recession since December 2007, according to the National Bureau of Economic Research, a private squadron demonstrating as the arbiter of business cycle, even on the other hand able to now the economy have not shown two succeeding base of decline.