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By Jeffry Bartash–

WASHINGTON (MarketWatch) — Corporate profits sank 3.2% in 2015 to mark the first decline since the Great Recession, adding another weight on a slow-growing U.S. economy.

American companies have been squeezed by falling exports, cheaper imports and continued caution on the part of savings-minded consumers. Firms have also incurred higher labor costs.

Adjusted pretax profits sank 7.8% in the fourth quarter, the Commerce Department said Friday. Profit figures are adjusted for depreciation and the value of inventories.

Adjusted profits fell 3.2% for all of 2015. By contrast they rose 1.7% in 2014, 1.9% in 2013 and 9.1% in 2012.

Adjusted profits fell 3.2% for all of 2015. By contrast they rose 1.7% in 2014, 1.9% in 2013 and 9.1% in 2012.

The drop in annual profits last year is the first since 2008, when the U.S. was in the middle of the worst downturn since the 1930s. Energy companies have been hit particularly hard by a slump in oil prices while manufacturers have been battered by a stronger dollar that makes it harder to sell goods overseas.

Weak earnings call into question whether companies can continue to add new workers at a rapid clip, increase investment and sustain an economic recovery that’s almost seven years old.

The first look at fourth-quarter profits was included in the government’s second revision to gross domestic product in the final months of 2015. GDP was raised to 1.4% from a prior 1% estimate, almost entirely because of higher consumer spending on recreation and transportation. Such costs could include auto insurance as well as shipping services provided by UPS and Fedex.

Consumer spending increased at a 2.4% annual pace in the final three months of 2015, up from a prior 2% estimate.

“Consumer spending and housing are keeping the economy going,” said Nariman Behravesh, chief economist at IHS Global Insight.

U.S. exports, meanwhile, fell a smaller 2% instead of 2.7%. The decline in imports was little changed at 0.7%.

The increase in the value of inventories, which adds to GDP, was lowered to $78.3 billion from $81.7 billion.

Most of the other figures in the latest revision to GDP were little changed. Construction outlays rose, business investment fell and government spending was essentially unchanged.

The government had originally estimated the economy expanded just 0.7% in the fourth quarter.