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Biggest hit as GDP falls: American exports

US output fell 3.8 percent at the end of 2008, but exports slid at a 20 percent rate.

SOURCES: US Bureau of Economic Analysis, National Bureau of Economic Research, Bloomberg /© 2009 MCT

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If you wonder why the machinery maker Caterpillar is laying off more than 20,000 workers, the answer comes through loud and clear in the latest numbers on America's economy.

As the nation's production of goods and services fell at a 3.8 percent annual pace in the final quarter of 2008, one of the steepest parts of the slide was in exports.

The global economic downturn means that Caterpillar, which not many months ago was one of corporate America's big stories of industrial success, is selling a lot fewer excavators and pipe layers.

For years, US exports grew faster than other parts of the gross domestic product (GDP). But in the most recent quarter, exports fell much faster than the rest of the economy, declining at a 20 percent annual pace.

It's a sign of how a recession that began with trouble in American mortgages has gone global, and now that global impact is bouncing back at the US.

"We're in the grips of a simultaneous global downturn," John Lipsky of the International Monetary Fund told world leaders assembled in Davos, Switzerland, Saturday.


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