US gross domestic product (GDP) shrank by less-than-expected between April and June, indicating that the recession is easing its grip on the world's largest economy.
Preliminary estimates for second quarter GDP -- the key measure of a country's output of goods and services -- fell at an annual pace of 1 percent, a more modest decline than the 1.5 percent expected by economists.
New figures today also revealed that GDP fell by a higher-than-estimated 6.4 percent in the first three months of the year -- the most savage drop since 1982. Official figures had previously shown a fall of 5.5 percent.
Output in the second quarter was dragged down by a fall in domestic investment and consumer spending as Americans reined in their spending in the face of one of the worst economic slowdowns since the Second World War.
Domestic investment dropped by a fifth while consumer spending fell by 1.2 percent, official figures showed.
The fall in GDP between April and June marks the fourth consecutive quarter of decline in economic output -- the first time the US economy has shrunk for a solid year since records began in 1947.
Economists expect a turnaround in the third quarter as the economy begins inching its way out of recession, but some analysts warned that an upturn in GDP could be a ''sugar high'' as companies that have run down their stocks started re-stocking once more.
