Economy Avoids Recession

Also, the Conference Board said that its Consumer Confidence Index, which declined sharply in March, fell again to 62.3 in April, down from the revised 65.9 last month and 76.4 in February. The consumer sentiment index, tracked by the University of Michigan, has also dropped to its lowest levels in over a quarter-century after the U.S. recorded three-straight months of declines in the job market.

Meanwhile, the components of Wednesday's GDP report from the Commerce Department did show some worrisome signs. Consumer spending, the nation's chief engine of economic growth, rose by just 1% for the quarter, down from the 2.3% growth rate in the previous quarter, which was the slowest reading since the second quarter of 2001.

Businesses cut back spending on equipment and software at a 0.7% pace, and they restrained spending on commercial construction at a 6.2% pace.

On the bright side, businesses boosted their investment in inventories in the first quarter, and exports of U.S. goods and services, boosted by the weakening dollar, also helped first-quarter growth. Spending by the government rose at 2% for the second quarter in a row.

"Overall, soft and softening, with worse to come in the wake of the collapse in consumer confidence," said Ian Shepherdson, chief U.S. economist with High Frequency Economics, in a note to clients.

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