WASHINGTON - THE US economy tumbled at a 5.5 per cent pace in the first quarter, but appears to be doing better now.

The revised reading on gross domestic product, released on Thursday by the Commerce Department, showed the economy from January through March didn't fall as deeply as the 5.7 per cent annualised decline reported a month ago.

Economists were predicting the government would stick with its previous estimate.

The main forces behind the small upgrade: businesses didn't cut stockpiles of goods as much and imports dropped more sharply than previously estimated.

Meanwhile, the rebound in consumer spending was a little less energetic.

Consumers boosted their spending at a 1.4 per cent, down from a 1.5 per cent growth rate estimated last month. Still, it marked the strongest showing in nearly two years and a huge improvement from the fourth quarter when skittish consumers slashed spending by the most in nearly three decades.

All told, the report showed the economic damage inflicted by the recession, the longest since World War II. The worst financial crisis since the 1930s, a housing bust and hard-to-get credit have eaten into businesses' sales and profits, forcing them to cut back production and jobs. In the final quarter of last year, the economy plunged at a 6.3 per cent annualized pace, the most in a quarter-century.

Many analysts believe the economy isn't sinking nearly as much now as the recession eases it grip on the country.

For the current April-June quarter, economists predict GDP is sinking at a pace of between 1 and 3 per cent. But that's not nearly as much as it had in the prior six months, the worst performance in 50 years. The government will release second-quarter results at the end of next month.

GDP measures the value of all goods and services produced within the United States and is the best barometer of the country's economic health. -- AP