After a better-than-expected housing report, new economic data suggest the pace of the general economic decline has slowed substantially in the second quarter of 2009.
The U.S. economy shrank at an annual rate of 1 percent – far less than the 6.4 percent drop registered in the first quarter – according to a government report released Friday.
It was also less than the 1.5 percent predicted by economists surveyed by Briefing.com.
Politicians have been split on their assessment of whether the economic stimulus package passed in February has contributed to the improvement.
While Democrats believe the government spending, made possible by the nearly $1 trillion stimulus, has stopped the economy’s free fall, many on the Republican side point to the dangers of a massive debt that is being accumulated and pushed onto the shoulders of future generations.
In an interview with CNN, Arizona Republican Senator and former presidential candidate John McCain admitted the spending may be helping the economy, but expressed concern that its levels are "unsustainable" and constitute only a short-term solution.
Many commentators expect the GDP to enter positive territory in the third or fourth quarter of the year, although it is hard to predict by how much. However, they are also suggesting that a sustained recovery will be difficult without an increase in consumer spending, which has thus far been hampered by high unemployment, currently at 9.5 percent.