The U.S. economy shrank in the fourth quarter of last year as consumer spending recorded the worst slide in the postwar era.

The 3.8 percent annual pace of contraction in the final three months of last year was less than forecast, with a buildup of unsold goods cushioning the blow, but was the largest quarterly decline since 1982. Without the jump in inventories, the contraction would have been 5.1 percent, the U.S. Commerce Department said today.

“It looks like the economy carried a lot of negative momentum into the first quarter,” former Federal Reserve Governor Laurence Meyer said in an interview with Bloomberg Television.

Gross domestic product (GDP) was forecast to contract at a 5.5 percent annual pace last quarter, according to the median estimate of 79 economists surveyed by Bloomberg News. Projected declines ranged from 3 percent to 7 percent.

Consumer spending, which accounts for more than two-thirds of the U.S. economy, dropped at a 3.5 percent annual rate last quarter following a 3.8 percent drop the previous three months, marking the first time purchases declined by more than 3 percent in consecutive quarters since record keeping began in 1947, Bloomberg reported.

For all of 2008, the economy expanded 1.3 percent as a boost from exports and government tax rebates in the first half of the year helped offset the deepening spending slump.

Some economists cautioned that the smaller-than-expected drop in economic activity wasn’t good news, but a warning sign about further weakness ahead.

“Today’s GDP report is no cause for celebration,” Jay Bryson, global economist for Wachovia Corp., told CNNMoney.com. “The economy is even weaker than the number would suggest.”