Economists said the drop in economic activity — with the gross domestic product shrinking at a 0.3 percent annual rate — presages more bad news in the months ahead. The impacts of a now-global financial crisis are continuing to squeeze companies and impede investment, prompting more layoffs and another wave of austerity.

“The economy has taken a turn for the worse, big time,” said Allen Sinai, chief global economist for Decision Economics, a consulting and forecasting group. “Consumption literally caved in. It is a prelude to much worse news on the economy over the next couple of quarters. The fundamentals around the consumer are all negative, and there are no signs of any help anytime soon, from anywhere.”

In an election likely to be decided by the economy, the latest batch of dismal data offered no comfort to the Republican nominee, Senator John McCain of Arizona, who has been running behind the Democratic standard-bearer, Senator Barack Obama of Illinois, according to polls.

Though he has labored to distance himself from his fellow Republican, President Bush, whose approval ratings have dropped below 30 percent, Mr. McCain has battled perceptions that he is linked to the economic stewardship of the incumbent administration.

Economic downturns have proved unkind to candidates from the incumbent’s party. Many analysts argue that the recession of 1990 and 1991 cost President Bush a chance at re-election in 1992. President Jimmy Carter, a Democrat, lost his 1980 re-election bid to Ronald Reagan after a particularly nasty recession earlier that year. In 1960, in the midst of a recession, John F. Kennedy, a Democrat, defeated Richard Nixon, who had been vice president in the Eisenhower administration.

Not since 1900, when William McKinley, a Republican, won re-election, has the incumbent party retained the White House in the midst of or within a few months after a recession.

In a statement Thursday morning, the White House acknowledged the weakening of the economy, while pinning the blame on a series of unusual events.

“Today’s G.D.P. report is weak, but it is not unexpected,” a White House spokeswoman Dana M. Perino. “A number of things contributed to the slowing economy in the third quarter — record high energy prices, housing and credit concerns, two major hurricanes and a prolonged Boeing strike. The president is taking forceful actions to return the economy to growth and job creation by early next year. While we continue to face serious challenges, the United States remains the best place to do business, and we’re positioned to bounce back.”

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