We are Now in a Recession

It seems that the economy contracted by 0.3 percent and we need one more quarter of that and we will be in a textbook recession.

Consumer spending, which fuels two-thirds of U.S. economic activity, fell at a 3.1 percent rate in the third quarter -- the first drop since the closing quarter of 1991. Spending on nondurable goods -- items like food and paper products -- shrank at the sharpest rate since late 1950.

Heavy government spending, still-strong export growth and a slower pace of inventory liquidation helped mask the extent of deterioration in other sectors.