The U.S. economy ended 2008 in a deeper hole than originally thought, sinking at its fastest pace since 1982, as corporations responded to the recession by slashing inventories.

The nation's gross domestic product, or GDP, contracted by 6.3 percent in the final months of last year, slightly worse than the 6.2 percent, previously announced by the Commerce Department.

But the numbers were still not as bad as expected, because the consumer is showing signs of life, and that's a positive signal, according to Beth Ann Bovino, senior economist at Standard and Poor's.

SOUNDBITE: BETH ANN BOVINO, SENIOR ECONOMIST, STANDARD AND POOR'S (ENGLISH) SAYING:

"It seems that with the consumer spending a little bit more than what everybody feared - actually getting to the mall a little more often that we all had worried about and the businesses actually cutting back on inventories, certainly as seen in the fourth quarter, it means in the first quarter businesses are going to have to put some more stock on their shelves and that's actually going to be strength for our GDP going forward."

But in a sign the economy is not getting much better: The number of Americans receiving state unemployment benefits hit another new record earlier this month at more than 5-1/2 million. And just last week, first-time claims were up, according to Labor Department.

SOUNDBITE: BETH ANN BOVINO, SENIOR ECONOMIST, STANDARD AND POOR'S (ENGLISH) SAYING:

"We don't expect jobs to actually come back anytime soon in fact we're expecting unemployment to keep continue to rise we're looking at something upward of around close to 10 percent."

And with dismal predictions that like, few economists expect an economic rebound any time earlier than next year - at best.