The U.S. economy managed to avoid its first quarter of contraction since 1993, but the distinction in this morning's

GDP numbers may have meant more to the media than money managers.

Many economists and investors feared GDP growth would be revised into negative territory, tipping the odds in favor of recession. (According to popular definition, two quarters of negative growth make a recession.)

But it wasn't. Though the U.S. economy grew at its slowest pace in eight years during the second quarter, it did at least grow. Second-quarter GDP was revised down to a 0.2% annual growth rate from the original estimate of 0.7%, beating consensus forecasts that argued growth would come in at zero.

"It's better that it's plus than minus," said Paul Kasriel, chief U.S. economist at Northern Trust of Chicago. "Everyone was ready to run the story that it was the first decline since 1993. Are we in a recession? We may be in a recession. But I don't think we are."

Despite the supposed importance of this number to investor psychology, the stock market couldn't sustain its initial good cheer. Futures spiked shortly after the data came out at 8:30 a.m. EDT, and stocks rose at the market open, but by midmorning they were decidedly lower.

In recent trading, the

Dow

was down 117 points, or 1.2%, to 10,105. The

Nasdaq

was lower by 23 points, or 1.2%, to 1842, and the

S&P 500

was losing 10 points, or 0.9%, to 1152.

The better-than-expected number didn't have a whole lot of impact on expectations for further interest easing, either. The October fed funds futures contract is still pricing in a 70% chance of a quarter-point rate cut at the October

Federal Reserve

meeting.

Once again, the consumer was the economy's saving grace. According to this morning's data, consumer spending grew 2.5% in the second quarter, up from previous estimates of 2.1%.

"Consumers kept GDP out of negative territory. Growth in consumer spending increased by 0.4 percentage points -- otherwise we would have gone negative," said Kasriel.

Throughout the downturn consumer spending has held up well, helping to ease the pain of a manufacturing recession and preventing the whole economy from slipping into negative territory. This has surprised some economists. Unemployment rose to 4.5% in July from 3.9% last October, the kind of increase that usually leads to contraction.

Of course, there is still a possibility that the economy could stack up two quarters of negative growth, but economists think the odds are pretty low.

"There's about a 25% chance that we could still fall into recession," says Ethan Harris, senior economist at Lehman Brothers, who forecasts 2% growth for the third quarter. "The third quarter is going to be hard to get a negative number out of. We would need to see a collapse in the stock market or consumer confidence, something really dramatic."

With tax rebates, lower energy prices and lower interest rates, economists think a real decline in consumer spending is unlikely. Meanwhile, this morning's GDP numbers also showed that inventories were liquidated at a faster pace than economists were first estimating, suggesting that future new orders are more likely to be filled by new production rather than old production. "That doesn't require a burst of demand going forward, but it does require some demand," said Kasriel.

Even if the consumers decide to jump ship after their rebate checks are spent, they may have served their purpose by then, and other areas of the economy could be stronger. "Consumer spending could slow once the rebate checks are spent, but the tax cuts are continuing," said Gerald Cohen, senior economist at Merrill Lynch. "If the consumer starts to pull us out, and other things turn around at the same time, then you won't need the consumer. In the first half of the year, we'll get companies saying we've bottomed."

Some of the fears over negative GDP growth were misplaced anyway. Those who actually decide whether or not the economy has fallen into recession -- the National Bureau of Economic Research -- use a very different metric. Rather than two quarters of negative growth, the bureau looks for a breadth of weakness in the economy.

"Two quarters of negative growth don't come close," said Harris. "We don't have the breadth of weakness that we look for. It can't be one sector getting crushed and pulling down the economy. Right now that's what's happening in manufacturing."