Economic activity was weakening even before the intensification of the financial crisis this fall. The sharp falloff in consumer spending during the summer was particularly striking. According to the latest estimates, real gross domestic product (GDP) declined at an annual rate of 0.5 percent in the third quarter, with personal consumption falling at an annual rate of 3.7 percent.
In the upswing, a positive feedback loop has emerged between labor market developments and consumer spending. Formal employment has continuously expanded, as measured by  1  Average annual GDP growth was 2.3 percent from 2001 to 2007, and 4.6 percent from 2010 to the first half of 2012.