FXstreet.com (Barcelona) - US economy contracted in the last quarter of 2008 at its fastest pace in more than 26 years on the back of sharp declines in business and consumer spending, according to preliminary data released by the U.S Commerce Department.

Annualized Gross Domestic product shrunk at a 3.8% seasonally adjusted pace from October to December 2008, following a 0.5% decline in the previous quarter. This is the largest GDP decline since the 6.4% in the first quarter of 1982.

In the whole 2008 year, U.S. Real Gross Domestic product has grown a1.3%, somewhat lower than the 2.0% growth posted in the previous year.

Real Personal Consumption Expenditures declined 3.8% in the fourth quarter, following a 3.5% fall in the third. The rice index for Gross Domestic Purchases , which measures prices paid by U.S. residents, has dropped 4.6% in the fourth quarter, reversing a 4.5% increase in the previous quarter.