WASHINGTON - The U.S. economy limped through the first quarter, growing a slender 0.6 percent as housing and credit problems forced people and businesses alike to hunker down.
The growth in the gross domestic product was reported yesterday by the Commerce Department. The GDP - the sum of all goods and services produced in the United States - is the broadest measure of the economy.
The pace of growth in the January-through-March quarter was the same as in the final three months of last year and means the economy, while sluggish, is not in a recession; it is still managing to grow, even if slightly. Economists typically define a recession as two straight quarters of contraction.
Many analysts had been predicting that GDP growth would be a bit weaker in the first quarter - just 0.5 percent. Earlier this year, some thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that likely will happen during the current April-to-June period.
"The economy is weak, but not collapsing," said Lynn Reaser, chief economist at Bank of America Corp.'s Investment Strategies Group. "A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."
The housing situation turned bleaker in the first quarter, as record foreclosures dumped more unsold homes onto the market, adding to builders' headaches. Builders slashed spending on housing projects a whopping 26.7 percent, on an annualized basis, the most in 27 years. That was the biggest drag on the GDP.
Consumers - whose spending is vital to the country's economic health - turned much more cautious, also restraining overall economic growth in the first quarter. Their spending rose at just a 1 percent pace. That was down from a 2.3 percent growth rate at the end of last year and was the slowest since the second quarter of 2001, when the United States was suffering through its last recession.
Shoppers cut spending on items such as cars, furniture, household appliances, food and clothes.