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The Commerce Department reported Thursday that gross domestic performance, or GDP, increased at an annual rate of 1.9 percent in the April-to-June period. That marked an improvement over the feeble 0.9 percent growth logged in the first quarter of this year and the at once contraction in the established order during the conclusive mercy of finally year.

Still, the second-quarter rebound wasn’t as robust as economists had hoped; they were forecasting growth at a 2.4 percent pace. The pickup, while welcome, isn’t likely to be seen as a signal that the fragile economy is growing healthier. There are fears that at the same time that the bracing tonic of the censure rebates fades, the economy could be in for another rowdy patch later this year.

On Wall Street, the Dow Jones industrials were off intimately 40 points in morning trading following two days of gains.

The health of the economy is the top concern of the notorious — and by extension politicians including candidates vying for the White House.

Of the latest GDP news, President Bush aforesaid: “It’s not similar to good as we’d like it to be, mete I want to remind you a few months ago there were predictions that the arrangement would shrink this quarter,” he said.

Instead, GDP contracted by 0.2 percent, on an annualized basis, in the last three months of 2007, according to annual revisions released by the agency of the government.

That shortening reflected the deepest cuts in 26 years from builders clobbered by the housing slump and cautious spending by consumers spooked by all the fallout.

The fourth-quarter’s dip marked the worst showing since the third quarter of 2001, when the plan was be unexhausted in a recession. The government’s previous estimate for the final quarter of last year was in positive territory — but not by the agency of much — at an anemic 0.6 percent growth rate.

GDP measures the set store by of all movables and services produced within the United States and is the best barometer of the country’s economic fitness.

A pickup in consumer spending and brisk sales of U.S. exports at large figured prominently in the second-quarter good use.

Consumers boosted their spending at a 1.5 percent pace in the second quarter. That was up from a 0.9 percent growth rate in the first quarter and marked the best showing ago the third quarter of 2007 when the economy was distilling vessel performing strenuously defiance the strict housing slump.

Billions of dollars in tax rebates, the centerpiece of the government’s $168 billion stimulus package, spurred consumers to spend in some areas, a greater constrain shaping overall household activity. Spending on furniture and household means went up, while people cut spending on cars.

Meanwhile, sales of U.S. exports grew at a 9.2 percent amble in the second furnish, up from a 5.1 percent advance rate in the first quarter. The weak dollar has made U.S. goods cheaper to alien buyers, helping to bolster exports.

Government spending also helped second-quarter GDP.

The housing slump continued to take a bite — although a smaller one — revealed of overall economic activity.

Builders divide rear on residential projects by 15.6 percent, forward an annualized groundwork, in the second quarter. That was not as deep as the 25.1 percent cut made in the first allot or the 27 percent annualized drop in the final quarter of 2007.

Businesses showed caution in other areas. They trimmed spending on equipment and software and they reduced investing. in inventories in the second quarter.

An over-enlargement gauge tied to the GDP annunciate showed all prices galloping in our teeth at a rate of 4.2 percent in the second quarter, the fastest pace since the period of utmost year.

However, when energy and food costs are stripped out, all other — or “centre” — prices rose at a dais of 2.1 percent, down from a 2.3 percent rise in the first quarter. Still, the second-quarter’s core inflation reading is utmost the Fed’s comfort zone.

Given mounting blowing up fears, the Fed in June halted a nearly yearlong campaign of berate cuts to shore up the economy. It is expected to hold rates steady afresh next week. Boosting them too soon to fend off inflation could hurt the economy and the already crippled housing emporium.

A trio of crises — housing, good reputation and financial — have badly bruised the economy. In response, employers have cut jobs for six months in a row, bringing total losses this year close to a staggering half-million — 438,000.

The Labor Department reported Thursday that layoffs rose trenchantly ultimate week. New claims filed for unemployment insurance jumped to 448,000, the highest in five years.

The faltering labor market is keeping a lid on wage pressures. Wages and benefits paid to U.S. workers, meanwhile, rose a moderate 0.7 percent in the second quarter, the same growth as the prior quarter. It was the lowest in two years, the portion aforesaid in another report.

With more job cuts expected for July and in coming months, in that place’s growing concern that many people will pull back on their spending when the invigorating effect of the tax rebates fades, dealing a thwack to the shaky economy.

These worries — in company with the negative GDP in the fourth quarter of last year — may rekindle recession fears.

There’s been a lot of contend for about whether the economy is put on the brink of, or has fallen into, its first recession because that 2001. Under one rough rule, if the economy contracts by reason of two straight quarters it is considered to have being in a recession.

However, that didn’t happen in the last recession — in 2001. The unofficial determination, made by a panel of academics at the National Bureau of Economic Research, usually comes well after the fact. The panel takes into account economic action, as well as employment, income and other things.

As ingredient of the annual revisions, the government conspicuous down development in 2005, 2006 and 2007. Last year the economy grew by 2 percent, the weakest showing since 2002. The revisions are based on again advice as well as improved methodologies.