New York  - Wall Street dipped on Friday after government figures showed the US economy had contracted at an annual rate of 3.8 per cent in the final quarter of
2008.

The gross domestic product figures were the worst three-month performance in 27 years and plunging the US further into a serious recession, according to a preliminary estimate by the US Commerce Department.

But the drop was smaller than many had expected and compares to a 0.5-per-cent contraction in the third quarter. The world's largest economy has been in recession since December 2007.

The blue-chip Dow Jones Industrial Average slid 148.15 points, or 1.8 per cent, to 8,000.86. The broader Standard & Poor's 500 Index lost 19.26, or 2.3 per cent, to 825.88, while the technology-heavy Nasdaq Composite Index shed 31.42 points, or 2.1 per cent, to 1,476.42.

For the week, the Dow was down nearly 1 per cent, and the S&P fell 0.7 per cent. It was the worst January ever for the S&P 500, with a loss of 8.6 per cent for the month, Bloomberg financial news reported.

The US currency rose against the euro to 78.05 euro cents from 77.26 euro cents Thursday. The dollar dropped against the Japanese currency to 89.92 yen from 90.11 yen. (dpa)