Fourth Quarter GDP Contraction Revised to 6.3 percent

Data released by the U.S. government Thursday punctuated the severe slide felt by the American economy late last year.

Early Thursday, the Commerce Department revised its estimated decline of Gross Domestic Product (GDP) in the fourth quarter of 2008 to 6.3 percent from its previously announced 6.2 percent.

Although worse than initially reported, the numbers provided some good news for markets Thursday: the revised contraction in GDP is refreshingly better than the 6.5 percent that economists were expecting.

Still, 6.3 percent is the third largest decline in GDP in more than 50 years.

Also, to make matters worse, the Labor Department said that new claims for unemployment benefits rose to a seasonally adjusted 652,000 last week, from 644,000 the week before. The total number of people claiming benefits rose to a ninth-straight record high of 5.56 million.

Economist don’t expect that the news will get any better, as GDP is expected to fall about 5 percent in the current first quarter of 2009.