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Washington (ANTARA News) - The US economy has limped ahead over the first portion of 2008 just enough to avert the onset of recession, but some analysts say the slowdown is causing pain regardless of the definition.

Official data from the Commerce Department showed growth at a 0.6 percent annual pace in the January-March period, matching the pace of the fourth quarter of 2007.

The first estimate of gross domestic product (GDP) was slightly better than expected and came amid fears that the world's biggest economy is headed for recession, generally defined as two consecutive quarters of declining activity.

"The numbers are still not showing a recession in a technical sense," said Eugenio Aleman economist at Wells Fargo.

"The problem is that because the economy has grown so little, it feels like a recession -- 0.6 percent is not enough to make up for growth in the US population."

Barry Ritholtz at Ritholtz Research and Analytics said this should be considered a recession considering that growth is failing to keep up with population growth and what he considers "true" inflation measures.

"It doesn't take too much advanced mathematics to note that by several historical methods for determining whether the economy is contracting or expanding, we are now in a recession," he said.

Joel Naroff at Naroff Economic Advisors said a recession mentality has taken hold and this will keep the world's biggest economy in a funk until sentiment improves.

"It is irrelevant whether this is a technically a recession as most individuals, businesses and governments think we are in a recession," he told AFP.

"They are spending accordingly and this report will not change attitudes."

A survey released Wednesday by the American Institute of Certified Public Accountants showed 68 percent of US adults believe the economy is heading toward a recession, and slightly more than half are cutting their spending and paying down debt as a result.


Weak and getting weaker

Economist Aneta Markowska at Societe Generale said the economy is weak and getting weaker.

"Though technically positive, these are still extremely soft GDP readings," she said. "For the US economy which can potentially grow at about 2.75 percent, consistent growth below 1.0 percent should be considered recessionary."

The outlook for the second quarter is troublesome, Markowska added.

"Chances to maintain a positive GDP reading in the second quarter are not evident in this data," she said. "Inventories will likely subtract from growth in the second quarter, housing will remain a drag and business spending is unlikely to recover in the near term."

Consumer spending, the key driver of the economy, slowed to a 1.0 percent
growth rate from 2.3 percent in the fourth quarter. It was the weakest growth
in consumer activity since the 2001 recession.

Growth was helped by increasing exports and inventory building. Weakness in
the housing market continued to be a major drag on growth. Real residential
fixed investment fell 26.7 percent in the first quarter.

Without the inventory adjustment, the economy would have seen a decline of 0.2 percent in the first quarter in a figure known as "real final sales."

The report came hours before the Federal Reserve cut its base lending rate another quarter point to 2.0 percent as insurance against a deep and prolonged downturn. It was the latest in a series of cuts of a total of 3.25 points since September.

The Federal Open Market Committee said in its statement that financial
markets remain under stress and that there is considerable uncertainty about
the inflation outlook.

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