The economy shrank at its fastest pace in nearly 27 years during the fourth quarter of last year – plunging the nation’s economy deeper into recession following the financial meltdown of last fall.

In a Commerce Department report released today, the gross domestic product, which measures total goods and services output within the US, plummeted at a whopping 3.8 percent annual rate.

That was the biggest drop since the first quarter of 1982 – when output contracted a staggering 6.4 percent, according to the feds.

Analysts said they fear the economy is likely to contract further after retailers and manufacturers – including Starbucks and Boeing – announced plans this week to slash payrolls and cut production.

Consumer spending, which accounts for more than two-thirds of the economy, dropped at a 3.5 percent annual rate last quarter. That follows a nearly 4 percent drop the previous three months.

It’s the first time purchases declined by more than 3 percent in consecutive quarters since the feds tracked the trend starting in 1947.

As the economy worsens, employers are expected to slash payrolls.

Companies cut 524,000 workers last month – bringing total job cuts for last year to almost 2.6 million.

The unemployment rate last month was 7.2 percent – up from 4.9 percent the previous year.