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“Of course, given the surprises and shocks over the past 18 months,” there is no guarantee, he said. Led by the slump in the U.S., Mr. Karl is predicting recessions in all the major economies from Europe to Japan, although he said the downturns in Japan and Canada will be milder than the one in the U.S.

Both presidential candidates responded quickly to the news.

“The GDP reduction confirms what Americans already knew: the economy is shrinking,” said Republican John McCains top economic adviser, Douglas Holtz-Eakin.

“America is producing less and selling less and our economy is shrinking,” said Democrat Barack Obama. “American consumers were especially hard hit, experiencing their largest decline in spending in 28 years as wages failed to keep up with the rising cost of living.”

“This looks like the lowest it has been in two decades, which goes to show that in the fourth quarter we are going into recession,” said Bill Walsh, president of Hennion and Walsh, an investment firm in Parsippany, N.J.

Mr. Obama blamed the slowdown on “the Bush Administration’s trickle down, Wall Street first, Main Street last policies.”

Mr. Holtz-Eakin said Mr. Obamas policies “would accelerate this dangerous course.”