The U.S. economy fell at a 0.5 percent pace in the third quarter, the government said Tuesday, revising down its earlier estimate for gross domestic product (GDP). The Commerce Department's November estimate came after they said in October that the downturn would be at 0.3 percent. The latest revision was in line with forecasts by private economists and reflected weaker consumer spending, exports and government expenditures. The report reflected an abrupt turn from growth of 2.8 percent in the second quarter, although analysts said that figure was changed by a surge in exports and consumer spending boosted by one-time tax rebates. Many economists say the downturn in the fourth quarter could be much worse, reflecting a credit crunch and ongoing woes in housing and manufacturing. The downturn is pinned to be associated to lower consumer spending, and some manufacturing sales. The housing sector still remains to be a heavy drag on the economy, with investment in property down 17.6 percent, even though that was slightly better than October estimate of a 19.1 percent drop. The housing sector alone subtracted 0.66 percentage points from GDP, while consumer activity cost 2.69 points from growth.
