Economy Shrinks At Fastest Pace Since 1930s-Economy Shrinks At 6.2 Percent Pace At End Of 2008

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The government said the economy shrank at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century.

Consumers and businesses ratcheted back spending, plunging the country deeper into recession.

The Commerce Department figure showed the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated by the government last month.

It also was a considerably weaker performance than the 5.4 percent annualized decline economists expected.

The faster downhill slide in the final quarter of last year came as the financial crisis -- the worst since the 1930s -- intensified.

With jobs disappearing, home values in the gutter and investment portfolios shrinking, Americans have been clinging to their wallets.

In turn, companies are slashing production and payrolls. Hard-to-get credit is also stymieing business investment and big-ticket item purchases.

Amid the doom and gloom, Fed Chairman Ben Bernanke has offered some hope, saying the recession might end this year if the government manages to prop up the shaky banking system.