Consumers Give Spark Of New Hope For Econ Revival

JEANNINE AVERSA

WASHINGTON (AP) — American consumers are snapping back to life, kindling springtime hopes that the recession is losing steam.

Even though the U.S. economy shrank again in the first three months of the year — and by a lot — Americans stepped up their purchases of cars, furniture and appliances. The surge in consumer spending, which accounts for about 70 percent of the economy, could set the stage for a rebound later this year.

Hopes for revival depend on those consumers, who have been fortified by fatter paychecks from tax cuts and smaller mortgage payments from refinancings. If they keep buying, businesses will need to boost production, feeding yet more economic activity.

Against that backdrop, many analysts think the economy is sinking less now than it did from January through March. Most believe it could start growing again by summer or, more likely, by the final quarter of this year.

Federal Reserve Chairman Ben Bernanke and his colleagues, opting against further action Wednesday to shore up the economy, detected glimmers that the recession might be easing.