The GDP, which measures the value of all goods and services produced within the United States, was expected to perform even worse in the first three months of 2008, but final numbers will not be available on that until late April.
One positive number to come out Thursday could be tied to the continued weak value of the American dollar compared with other currencies. Sales of U.S. goods and services to other countries grew at a 6.5 percent pace. That was better than the 4.8 percent growth rate previously estimated.
Thursday’s report underscored the damage to the economy from the collapse in the housing market, which has crippled housing prices, forced many homeowners into foreclosure and weakened consumer confidence in their finances.
The newest numbers also reverberated on the campaign trail, where Democratic presidential hopeful Sen. Barack Obama outlined a new stimulus effort and continued to sound the warning that Republican stewardship of the American economy had failed.
“We do American business — and the American people — no favors when we turn a blind eye to excessive leverage and dangerous risks,” Obama said.
In his speech, Obama outlined a new series of measures aimed at helping homeowners and proposed a $30 billion stimulus package.
Obama’s speech comes three days after Sen. Hillary Clinton warned the economy is “in serious trouble.”
“We have a crisis of confidence in our economy,” she said. “What started out as a subprime mortgage crisis has now become a national credit crisis, rippling out from banks and boardrooms to businesses and living rooms across America.”
Republican standard bearer Sen. John McCain, who has said the government should only intervene to address systemic problems in the economy, dismissed both Democratic senators addresses in a statement Thursday.
“There is a tendency for liberals to seek big government programs that sock it to American taxpayers while failing to solve the very real problems we face,” McCain said.
Obama countered that McCain’s plan to assist the economy “amounts to little more than watching this crisis happen.”