The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession.

The Commerce Department said gross domestic product, which measures the total output of goods and services within U.S. borders, fell at an annual rate of 6.2 percent in the October-December quarter, the deepest slide since the first quarter of 1982.

The government last month estimated the drop in fourth-quarter GDP at 3.8 percent. The weaker GDP estimate reflected downward revisions to inventories and exports by the department.

"The only good news is that we didn't actually accumulate inventories in the fourth quarter, there was some inventory reduction. But it wasn't anywhere near sufficient. The inventory sales ratio is still rising, even though we could see yesterday in the durable goods report that manufacturing inventories on the durables side fell in January. So there's still a big inventory correction that's going to come."