U.S. economy shrinks

As David Leonhardt puts it, "The longest American shopping spree on record is over." The U.S. government released its estimate of the country's third-quarter GDP growth this morning, and the news is grim, but not terrible: The economy contracted by 0.3 percent over the summer, driven largely by a plunge in consumer spending. The falloff in GDP was slightly lower than expected.

What can be particularly confusing is that these sorts of indicators tend to lag what is happening at any given point in time. This summer, for instance, consumers were probably cutting back as oil prices skyrocketed to nearly $150 a barrel (good news for ExxonMobil). Now, Americans' gas bills are getting cheaper, but they're more worried these days about frozen salaries, layoffs and their access to credit. Out of the frying pan and into the fire?