WASHINGTON (AP) – The economy shrank at a 3.8 percent pace at the end of 2008, the worst showing in a quarter-century, as the deepening recession forced consumers and businesses to throttle back spending.

The good news is: Worse was expected.

But, still: Bob Stein notes: “It was expected to be down at a 5.5% rate, so better than expected. Problem is that it exceeded expectations due to inventories, which means further deep weakness in Q1.”