According to the US Treasury Secretary Henry Paulson, the package has been announced for the availability of more lending to consumers.

The new package will be used to buy mortgage-backed securities and thaw out the freezing consumer credit market.

US President-elect Barack Obama says: “Budget reform is essential because of the current economic crisis. And it’s not an option, but a necessity.”

Meanwhile Mr. Paulson said, “It would take some time to get out of these difficulties in US market and economy and we will have to face new challenges.”

“We are determined to handle these situations efficiently and use all the available tools to strengthen our financial institutions and stabilize financial markets.”

The new announcement of injecting another $800bn came after Commerce Department figures which revealed that between July and September, US economic output shrank faster than expected and it was “troubling” as White House described it.

During the third-quarter, US GDP dropped at an annual rate of 0.5 percent, while it was estimated as 0.3% a month back.

According to a White House spokeswoman, “This bold action is being taken for this very reason.”

Though they showed the sharpest contraction of the economy since 2001, the gross domestic product (GDP) figures were better than expected. On the other hand, consumer spending that constitutes two-thirds of the US economy saw 3.1% shrinkage and it was the first contraction since 1991. This 0.3% shrinkage followed 2.8% growth during the last three-month period.

The figures related to shrinkage suggest that the US economy is halfway to the standard definition of a recession that shows two successive quarters of negative growth.

However, in the US the official definition is different and according to this definition the US economy is not officially in recession if the National Bureau of Economic Research doesn’t decide it.

But the Federal Reserve has shown concerns about recession and reduces its key interest rate from 1.5% to 1%. Bill Walsh, who is president of Hennnion and Walsh in New Jersey, said: “Consumer spending constitutes about 70% of GDP and it has been observed the lowest in two decades.”

The GDP figures along with Labor Department figures showed the number of new claims for jobless benefits last week.

According to Mexico’s central bank, the sharpest fall was recorded in remittances during July that was 6.9% down compared to the same period last year.

Besides oil revenues, remittances are counted Mexico’s second largest legal source of foreign income.

More than 20 percent Mexican migrants have been working in the US distressed construction industry.

Jesus Cervantes, who is the Director of Economic Measurement for Mexico’s Central Bank, says that the job situations for Mexican migrants has become quite complicated after the US mortgage crisis.

As the US has fallen 8% this year, the families of these migrants who depend on the sent money are suffering due to critical exchange rate of the Mexican peso against the US dollar.

According to Mexico’s central bank, during the first seven months of the year, remittances were 2.9 percent lesser than for the same period last year.

The flow of money from the US to Mexico is considered the largest flow of remittances in all migrant workers worldwide.

In general, the migrants send almost $300bn to their homes from the US which is three times higher than the level of foreign aid.

This growth is being considered a result of strong exports, weaker dollar and tax rebates that help to boost consumer spending.

During the first quarter, GDP grew at a rate of 0.9 percent and a 0.2 percent contraction was noted during the last three months of 2007.

However, it has been warned by the Federal Reserve that economy will be weak in this year.

“We are beginning to see some sunlight, but we are not out of woods yet,” stated John Wilson, who is equity strategist at Morgan Keegan.

The data showed that there was a 13.2 percent increase in the exports while the government was estimating it around 9.2 percent. And there was a 7.6 percent decrease in imports as the slowdown of the US economy reduced the demands of goods imported from the other countries.

This improved trade balance increased 3.1 percent points to GDP in the second quarter and it was the biggest since 1980.

A significant slowdown was noticed in the housing market as builders limited their business to reduce their spending.

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• The US Commerce Department

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However, some economists seem worry as they believe that increasing economic weakness overseas and a rebound in the value of the dollar can become the cause to end this export boom till the end of this year.

On Wednesday, the Commerce Department reported that there was a 1.3 percent increase in durable goods orders in last month and it was far above than 0.1 percent that Wall Street was expecting.

The better-than-expected gain in durable goods orders encouraged the Wall Street investors and the Dow Jones industrial average increased to 89.64 points and closed at 11,502.51.

Orders for commercial aircrafts had fallen sharply in June, but in July there was huge rebound in these orders that helped to strengthen the last month figures. However, aside from commercial aircraft category, there was a considerable growth in other categories that showed American companies were reaping the benefit of a boom in export that was mainly due to the falling value of the dollar earlier this year.

Some economists concerned over how long the boom in export would last as weaker economic conditions can be predicted in Japan, Europe and other big overseas markets.

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The Commerce Department

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