WASHINGTON — The recession inflicted even more damage on the economy last year than the government had previously thought.
The Commerce Department, in revisions issued Friday that date back to the Great Depression, now estimates that the economy grew just 0.4 percent in 2008. That’s much weaker than the 1.1 percent growth the government had calculated earlier.
Behind the downgrade are several factors: Consumers cut spending 0.2 percent last year, compared with a 0.2 percent increase previously reported. And the housing market sank further in 2008 than was thought. Builders slashed spending 22.9 percent, more than the 20.8 percent 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 percent. That was in contrast to the 0.9 percent growth previously estimated.
The economy grew in the second quarter of 2008, but less than was thought. And for the third quarter, the drop in economic activity was deeper than previously estimated.
The final quarter of 2008 showed an annualized drop of 5.4 percent — steep, but not as much as the 6.3 percent annualized decline earlier estimated.
