A new government report is expected to show the U.S. economy contracted sharply during the last three months of 2008.

Economists predict Friday's report from the Commerce Department will show the U.S. gross domestic product - a measure of all the goods and services produced in the nation - fell by more than five percent - the steepest drop in 26 years.

The GDP fell by one-half of one percent during the previous period.

American consumers have drastically pulled back spending, which is the major driving force behind the U.S. economy.  As a result businesses have had to cut workers to save costs, creating a rising wave of unemployment.

President Barack Obama is pushing for a massive government spending package designed to create jobs and help the economy recover.  The $819 billion plan, which passed the House of Representatives earlier this week, includes spending on infrastructure projects and tax cuts.  The Senate is now considering the measure.

Some information for this report was provided by AP.