Numbers are in for the third quarter of 2008, and the U.S. economy shrank by .3 percent. This comes after 2.8 percent growth in the second quarter, meaning we’re still one more negative growth quarter away from officially being in a recession.

But signs aren’t good. Consumer spending, which fuels two thirds of our economic growth, dropped by 3.1 percent, the first drop in quarterly spending since 1991 and the biggest drop since 1980. A quick rebound in consumer spending seems unlikely as personal income fell by 8.7% last quarter, the steepest decline since quarterly measurements of personal income began in 1947. Then, there’s inflation, which has continued: last quarter personal consumption expenditures rose by 5.4% (2.9% excluded food and energy), which is an increase over the second quarter.

What does all this mean? It means the next president has a lot of work to do and blaming it on Bush is only going to work until, oh, March or so. The keys will be getting the credit markets back up to full speed and creating job growth. But don’t expect any magic remedies. My guess is we’ll have to muddle through for awhile, no matter who is elected or what plans are put in place.

Business Bad Economic News Continues