Consumers Give Spark Of New Hope For Econ Revival

"The pace of contraction appears to be somewhat slower," Fed policymakers said in a statement a few hours after the government released its report showing a second straight big quarterly drop in the nation's gross domestic product.

On Wall Street, stocks jumped higher. The Dow Jones industrials gained nearly 170 points.

At the start of his news conference Wednesday night, President Barack Obama praised recent gains but said much was left to do.

"Even as we clear away the wreckage of this recession, I have also said that we cannot go back to an economy that is built on a pile of sand — on inflated home prices and maxed-out credit cards, on overleveraged banks and outdated regulations that allowed the recklessness of a few to threaten the prosperity of us all," he said.

The American consumer is still a wild card in any recovery scenario.

Though the Federal Reserve noted that spending "has shown signs of stabilizing," it also said people's buying is still constrained by rising unemployment, falling home values and hard-to-get credit.