U.S may have shrunk more than estimated

The US economy may have contracted more than previously calculated with the pace of firings having increased in the last week. The world’s largest economy shrank at a 0.5 percent annual rate in last year’s third quarter.

Recent reports however show that retail sales, residential construction and home sales have improved. “The worst is probably behind us,” said an economist at JPMorgan in New York. “Hopefully, if policy works, we can actually start to see some daylight as we get to the middle of the year.”

Stepped-up efforts by the Obama administration and the Fed may help sustain the improvement in the economy. Carmakers are counting on the policy measures for survival.The revised figures for GDP, the sum of all goods and services produced, are expected later today in Washington.