Consumers are scaling back more than they have in decades, and it’s having a ripple effect on exchange traded funds (ETFs) and the economy’s gross domestic product.

GDP shrank in the third quarter by 0.3%, the worst showing since the same quarter of 2001, when the economy contracted by 1.4%, reports Jeannine Aversa for the Associated Press. This follows growth of 2.8% in the second quarter. If there’s a ray of good news in there, it might be that economists had expected the economy to shrink by 0.5%.

Some economists define a recession as two straight quarters of negative growth, so the numbers are likely to add to the feeling that we’re close to one, if we’re not already there. Consumer spending is two-thirds of the economy, but spending fell 3.1% in the third quarter. That’s the most since the second quarter of 1980, when the country was in another recession.

American Express (AXP) delivered what could be a harbinger of tough times to come for the credit industry by announcing that it was slashing 10% of its workforce. It’s part of an effort to cut costs by $1.8 billion in 2009, says Sara Lepro for the Associated Press.

Oil is tumbling this morning after making gains yesterday, last seen trading at $64.45 a barrel. One expert noted that oil seems to be pricing for a long, deep recession in the wake of the GDP reports, says Ikuko Kao for Reuters. It had risen earlier to $70.60 on a weak dollar and heightened risk appetite after the Federal Reserve cut interest rates.

Although unemployment remains high, benefit claims remained unchanged from last week, reports Lara Moscrip for CNN Money. Economists had expected the numbers to decline, however.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.