American consumers, alarmed by increasing job loss, unrestrained foreclosure homes, declining home market prices and investment portfolios, have prepared themselves against any worst possible situation by cutting down on their spending.



And because of low consumer confidence and purchasing, business profits were affected that led to reduce production and job loss.

Industry experts pointed out that the unabated increase in the number of foreclosure homes has crippled the housing market. In turn, credit is hard to come by for businesses and consumers.

This vicious cycle created the worst credit, housing and financial crises in the country since the 1930s and contributed to the rapid deterioration of the economy.

The U.S. Department of Commerce is scheduled to issue a report that is expected to show a 5.4 percent economic depression and significant increase in foreclosure homes in the last quarter of 2008.

Economists anticipated that the gross domestic product (GDP) would indicate that the country's economy declined more than the annualized 3.8 percent estimate that the U.S. government expected in the previous month.

GDP, considered as the best measure of the economic health of the country, takes into account the value of goods and services manufactured or produced within the country.

The projected quarterly GDP is expected to be the weakest since an annualized decline of about 6.4 percent during the first three months of 1982.

Many economists predicted an annualized economic decline of 5 percent and significant foreclosure homes increase for the first three months of 2009.

However, they do not rule out the possibility that unrestrained unemployment and foreclosure homes rates would even push down the GDP beyond the anticipated level.

Meanwhile, Ben Bernanke, chairman of Federal Reserve, has also warned that the country's economy is experiencing an intense contraction and will continue to shrivel in the first half of 2009.

However, he gave out hope that the economic recession and foreclosures may end this year if the Obama Administration will be able to boost the banking system.

President Barack Obama signed an estimated $787 billion economic recovery package designed to increase tax cuts and government spending and a $75 billion foreclosure prevention plan.