THE WORST US recession in five decades probably eased in the second quarter as trade and government stimulus mitigated the damage from declines in housing, inventories and consumer and business spending, according to a poll of leading economists.

The world’s largest economy shrank at a 1.5 per cent pace following a 5.5 per cent drop in the first three months of 2009, according to the median forecast of 66 economists surveyed by Bloomberg ahead of US commerce department figures that are due out this Friday.

Other reports may show orders for long-lasting goods fell and sales of new houses rose. Leaner stockpiles set the stage for a return to growth this quarter as manufacturing and homebuilding stabilise, while efforts to revive demand globally boost exports.

Consumer spending, which accounts for 70 per cent of the economy, may be slower to recover as unemployment is projected to keep rising and home values are likely to fall further.

“The recession has decelerated sharply and is starting to form a bottom,” said Joel Naroff, chief economist at Naroff Economic Advisors. “I think we’ll see some growth in the third quarter.”

A drop in the second quarter would be the fourth consecutive reduction in GDP, the longest losing streak since quarterly records began in 1947. The decline so far has been the deepest since 1957-58.

The commerce report will also include GDP revisions that may affect figures going back to when the government started keeping annual records in 1929.

Stocks rallied last week and bond prices fell on signs the economy was bottoming. The Dow Jones Industrial Average broke above 9,000 for the first time since January.

The US economy will grow at an average 1.5 per cent rate in the last six months of the year, according to economists surveyed by Bloomberg.

“The pace of decline appears to have slowed significantly, and final demand and production have shown tentative signs of stabilisation,” Federal Reserve chairman Ben Bernanke told Congress last week. – (Bloomberg)