News Buzz: Recession Fears After More Bad Economic News on GDP and Consumer Spending

Economy Shrinks as Consumers Cut Back on Spending: The government reported today that the economy shrank over the summer—the strongest indication yet that the United States may already be in the middle of a recession, which is defined as two consecutive quarters of negative GDP. After growing 2.8 percent in the spring, the GDP declined at a rate of 0.3 percent. Meanwhile, consumer spending fell more dramatically than it had in 28 years. Analysts say the problems became apparent in the summer both because of shaky global markets and because payments from the $168 billion economic stimulus had ended. The announcement came just a day after the Federal Reserve cut interest rates in an attempt to boost the economy.

Thirteen Blasts Tear Through Northeast India, Killing 61: Sixty-one people were killed and 300 injured in a series of synchronized blasts in northeast India today, most of them caused by bombs. No one has yet claimed responsibility for the violence. It's clear, however, that the perpetrators belong to one of the militant separatist groups that have been targeting the government in the region, a hotspot of ethnic and political violence surrounded by Bangladesh, Bhutan, China, and Myanmar and attached to India with only a slim strip of territory. Separatists have killed more than 10,000 people in the past decade.

Cuba Expects New U.S. President to Lift Embargo: After the U.N. General Assembly overwhelmingly supported repealing the U.S. trade embargo against Cuba yesterday, Cuba's government said it expects the next president to do exactly that. Since 1962, the U.S. has had no diplomatic relations with Cuba and has tried to isolate the country by restricting travel and trade—an embargo tightened by President Bush over the past eight years. The U.S. also lists it as a state sponsor of terror. Now, it seems like relations might change: Although the presidential candidates plan to deal with Cuba differently, both say they might favor easing restrictions. Barack Obama has said he'll meet with Raul Castro without preconditions and let Cuban-Americans visit family and send money between the two countries. John McCain lambasted Obama's offer to meet. Even so, he has said that once the U.S. is "confident that the transition to a free and open democracy is being made," restrictions can be eased.