The economy's contraction was more severe than originally believed in the third quarter.

According to the Commerce Department,

gross domestic product contracted by 1.1% in the quarter, a higher rate of decline than its first estimate of 0.4%.

The revised 1.1% rate is roughly in line with what economists had been expecting.

The revision reflected deeper cuts in inventories and a wider-than-estimated trade deficit. The report contained the Commerce Department's first estimate of third-quarter after-tax corporate profits: They fell 7.1% in the period after consecutive declines in the first and second quarters.

Consumer spending still managed to rise in the third quarter, but at its slowest rate in eight years. Some economists have

speculated that further declines in spending and personal income could prolong the recession, which is now thought to have begun in March.