The 2007-2009 recession, already in the record books as the worst in the 66 years since the end of World War II, was even worse than previously thought. 
 
 FILE - In this Jan. 21, 2010 file photo, a crowd of people walk during the morning rush hour in New York. The 2007-2009 recession, already in the record books as the worst in the 66 years since the end... (Associated Press) 
 
 From the start of the recession at the end of 2007 to the end in June of 2009, the U.S. economy shrank 5.1 percent. That is 1 percentage point worse than the previous estimate that the recession reduced total output during that period by 4.1 percent. 
 
 The new estimates emerged from the annual revision of economic data prepared by the Commerce Department's Bureau of Economic Analysis and released Friday. 
 
 Among the previous 10 postwar recessions, output in only two dropped by more 3 percent. In the 1957-58 recession, the economy contracted 3.7 percent. And during the 1973-1975 downturn, the economy fell 3.2 percent from the start of the recession to the end. 
 
 The government attributed the bigger declines in output in part to weaker consumer spending and business investment than previously estimated. 
 
 By year, the government's new figures show that the economy took a much bigger hit in 2009, when output shrank 3.5 percent. The previous estimate had shown a decline of 2.5 percent that year. 
 
 In 2008, the new estimate shows the economy contracted by 0.3 percent. The previous estimate had indicated that output was unchanged for that year compared with 2007. 
 
 The last recession began in December 2007 and lasted until June 2009. Though the economy has been growing since then, growth has been subpar. And the unemployment rate has remained elevated; it's now 9.2 percent. 
 
 The revisions showed that growth in 2010 was a bit stronger than previously estimated. They put growth for all of 2010 at 3 percent, up from a previous estimate that the economy grew 2.9 percent last year. 
 
 The revisions to the country's gross domestic product, the total output of goods and services, used more complete data for such items as consumer and business spending. 
 
 The government's annual revisions are released each July, along with its first estimate of growth for the April-June quarter of the current year. ||||| The fall in GDP from the fourth quarter was due to a 3 percent drop in construction, the most since the first quarter... Read More 
 
 The fall in GDP from the fourth quarter was due to a 3 percent drop in construction, the most since the first quarter of 2009, and a 0.4 decline in industrial production. Close 
 
 A pedestrian holds a Tesco-branded shopping bag as he looks in the at the window display of a store advertising a... Read More 
 
 A pedestrian holds a Tesco-branded shopping bag as he looks in the at the window display of a store advertising a "Bankrupt Stock" sale in the Kingston suburb of London. Close 
 
 Pedestrians walk through the More London office space against the backdrop of Tower Bridge, in London. 
 
 Pedestrians walk through the More London office space against the backdrop of Tower Bridge, in London. Close 
 
 Pedestrians walk through the More London office space against the backdrop of Tower Bridge, in London. 
 
 The U.K. economy shrank in the first quarter as Britain slid into its first double-dip recession since the 1970s, forcing Prime Minister David Cameron to defend his spending cuts in Parliament. 
 
 Gross domestic product fell 0.2 percent from the fourth quarter of 2011, when it declined 0.3 percent, the Office for National Statistics said today in London. The median of 40 estimates in a Bloomberg News survey was for an increase of 0.1 percent. A technical recession is defined as two straight quarters of contraction. 
 
 As an anti-austerity backlash gains ground in Europe, Cameron described the data as “disappointing” and pledged to support growth without backtracking on the U.K.’s biggest fiscal squeeze since World War II. The Bank of England is in the final month of its latest round of economic stimulus and the drop in output comes as prospects dim in the euro region, Britain’s biggest export market. 
 
 “This isn’t supportive of the fiscal consolidation program, so the government is likely to be concerned about that,” said Philip Rush, an economist at Nomura International in London. “The data were bad, and that supports the view that the Bank of England will do a final 25 billion pounds of quantitative easing in May.” 
 
 Bank of England policy maker David Miles had signaled yesterday that today’s result was possible, saying in an interview with Bloomberg News that a negative number “wouldn’t be a great surprise.” 
 
 U.K. 10-year gilts advanced immediately after the data were published before easing again. The yield rose 3 basis points to 2.123 percent as of 1:12 p.m. in London. The pound fell as much as 0.4 percent, then pared its decline to $1.6116. 
 
 Construction Slump 
 
 From a year earlier, the economy was unchanged in the first quarter. The median estimate in a Bloomberg survey of 31 economists was for 0.3 percent growth from a year earlier. 
 
 The quarterly drop in GDP was due to a 3 percent slump in construction, the most since the first quarter of 2009, and a 0.4 decline in industrial production. Manufacturing contracted 0.1 percent and services, the largest part of the economy, expanded by 0.1 percent, boosted by transport, storage and communication. 
 
 The data contrasts with a report today showing confidence among manufacturers rose to the highest level in two years this month. The Confederation of British Industry’s quarterly gauge of factory optimism surged to 22 from minus 25 in January. 
 
 Separate surveys this month showed that growth in services, manufacturing and construction accelerated in March. The British Chambers of Commerce said the GDP data is likely to be revised higher by the statistics office. 
 
 ‘Underlying Trend’ 
 
 Surveys “have shown a more positive picture, and we believe these give a more accurate indication of the underlying trends,” Chief Economist David Kern said in a statement today. “We think it is likely that the preliminary estimate will be revised upwards when more information is available.” 
 
 The FTSE 100 index rose 0.1 percent today. Still, its 2.6 percent advance this year trails the 4.9 percent increase by Europe’s Stoxx 600 Index. 
 
 Rising energy prices, government spending cuts and anemic wage growth are squeezing U.K. consumers, creating a drag on the recovery. Pay growth slowed to 1.1 percent in the three months through February, less than a third of the inflation rate. An extra public holiday in June to mark Queen Elizabeth II’s 60 years on the throne may also depress economic output in the second quarter. 
 
 Thatcher Elected 
 
 Britain, the first Group of Seven country to report output for the first quarter, was hit hard by the financial crisis that erupted in 2007 and GDP is still 4.3 percent below its pre- recession peak in early 2008. Only Japan and Italy are further behind among G-7 nations. 
 
 The last time Britain experienced a double-dip recession, defined as consecutive quarterly drops in GDP before the economy had recovered output lost in the previous recession, was 1975. That year, Labour Prime Minister Harold Wilson was in office and Margaret Thatcher was elected leader of the opposition Conservatives. U.K. Treasury forecasters and the International Monetary Fund predict the economy will grow 0.8 percent this year, the same as last year. 
 
 The data are “very, very disappointing,” Cameron said in Parliament today, adding that “I don’t seek to try and excuse them. There is no complacency at all.” He pledged to stick to his deficit-cutting plans, saying “the solution to a debt crisis cannot be more debt.” 
 
 ‘Very Tough’ 
 
 Chancellor of the Exchequer George Osborne said the U.K.’s economic situation is “very tough” and the government shouldn’t waver on its fiscal plans, which are aimed at eliminating most of the deficit by 2017. 
 
 “The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt,” he said in a statement. 
 
 Their Conservative Party has lost public support over last month’s budget, which voters say helped the rich at the expense of pensioners and charities, and the handling of a threatened strike by tanker-truck drivers. The Labour opposition led the Tories by 41 percent to 33 percent in an ICM Ltd. poll published yesterday. 
 
 In addition to the domestic budget squeeze, Britain’s recovery is being hampered by unfavorable export conditions. 
 
 Euro-area services and manufacturing output declined for a third month in April as the economy struggled to rebound from a fourth-quarter contraction, according to a report on April 23. Confidence among executives and consumers in the economic outlook in the region fell this month, economists in a Bloomberg survey said before data tomorrow. 
 
 BOE Stimulus 
 
 The economy may get little further help from the Bank of England, whose officials have suggested inflation may retreat less quickly than they forecast two months ago. Only Miles on the nine-member Monetary Policy Committee sought an expansion in emergency stimulus this month. He said yesterday in an interview with Bloomberg News that voting for more bond purchases was “still the right strategy.” 
 
 In Asia, all 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan (8301) releases new inflation forecasts on April 27. Most expect an increase ranging from 5 trillion yen ($62 billion) to 10 trillion yen. 
 
 The U.S. Federal Reserve will release its policy statement at around 12:30 p.m. today in Washington, and its forecasts for interest rates, growth, inflation and unemployment at 2 p.m. Policy makers will probably repeat their plan to keep the benchmark rate low at least through late 2014, economists say. 
 
 To contact the reporter on this story: Jennifer Ryan in London at jryan13@bloomberg.net 
 
 To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net ||||| As the debt talks stagnate in D.C., the Commerce Department has just released a gloomy report noting that the nation's gross domestic product rose by a rate of only 1.3 percent in the second quarter and revised the growth figure for the first quarter sharply down. The figures show the U.S. economy slowed to its "weakest pace since the recession ended," says the Associated Press and Reuters calls the rate "tepid." Economists surveyed by the Dow Jones Newswires "expected GDP to rise 1.8% in the second quarter." From The Wall Street Journal: 
 
 The Commerce Department Friday said gross domestic product rose at an annualized seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain. A big reason behind the downward revision in first-quarter growth was that the inventory buildup by companies was less than initially estimated, while outlays by the federal government and consumers were also revised down. 
 
 Higher gas prices and reduced consumer spending were cited as culprits for the slower pace of growth. 
 
 Want to add to this story? Let us know in comments or send an email to the author at ehayden at nationaljournal dot com. You can share ideas for stories on the Open Wire. 
 
 Erik Hayden
– We already knew the Great Recession was the worst in decades, but in fact we were even worse off than we thought, new figures show. The economy shrank 5.1% over the course of the recession, from 2007 to 2009—1 percentage point worse than the earlier estimate of 4.1%, the AP reports. Only two in the past 10 recessions saw a squeeze of more than 3%. And yes, the economy is now growing—but it expanded only 1.3% from April to June, the Commerce Department said, lower than expected. Officials also revised the growth figure for the first three months of the year to 0.4%, compared to an earlier estimate of 1.9%. That means that the past 6 months have seen the least growth since the end of the recession. Among the reasons: Gas prices, less consumer spending, and smaller government, notes the Atlantic. Combine these figures with the debt ceiling crisis, and it’s “like hearing about the Hindenburg on the day the 6-mile meteor hits the earth,” said a blogger.