The bruised United States (US) economy limped through the first quarter, growing at just a 0.6 per cent pace as housing and credit problems forced people and businesses alike to hunker down.

The country's economic growth during January through March was the same as in the final three months of last year, the US Commerce Department reported yesterday.

The statistic did not meet what economists consider a definition of a recession, which is a contraction of the economy.

But Wall Street gave up sharp gains and closed lower yesterday after the US Federal Reserve cut interest rates by a quarter point, but left investors guessing about the central bank's next move.

Spending rates looking up

The Fed's statement yesterday made it clear the central bank is less worried about economic growth than in March, but said that while the economy remains weak and the inflation outlook is still uncertain, its rate cuts and lending efforts over the past several months "should help promote moderate growth over time and to mitigate risks to economic activity."

This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly.

Many analysts were predicting that the gross domestic product (GDP) would weaken a bit more - to a pace of just 0.5 per cent - in the first quarter.

Earlier this year, some thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that is likely to happen during the current April-to-June period.

Unsure about recession

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America'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."

On Wall Street, investors found comfort that the GDP figure was a bit better than expected.

The Dow Jones industrials were up more than 100 points in morning trading.

Gross domestic product measures the value of all goods and services produced within the United States and is the best measure of the country's economic health.

Voters are keenly worried about the country's economic problems and so are politicians - in Congress, in the White House and on the campaign trail.