Economy takes shapes

WASHINGTON -- Experts expected the economic recovery to look like a lazy "L." So far this year, though, the economy has soared, tracing the right side of a steep "V."

But with Middle East tensions causing energy prices to rise, analysts say a "W" -- the dreaded double-dip recession -- cannot be ruled out.

So far, the economy has bounced back from the first recession in a decade with a powerful surge.

"We've had a very good start to the recovery, helped by all the stimulus provided by the government," said David Wyss, chief economist at Standard & Poor's in New York.

The fuel added by Washington over the past year has included President Bush's $1.35 trillion, 10-year tax cut, the aggressive interest rate cuts by the Federal Reserve and billions of dollars in increased government spending after the Sept. 11 attacks.

Some analysts believe that economic growth in the just-completed first quarter will show a sizzling 6 percent annual rate -- a far cry from what they were forecasting as the year began.

Just three months ago, the common view was that the recovery would start slowly, with the gross domestic product rising at around a 1 percent rate.

That reflected the view that consumers -- who normally drive the economy out of a downturn -- would provide less momentum this time around because their spending had held up so well in 2001.

So far this year, though, housing sales and auto sales have powered ahead, and there has been a sizable turnaround in business inventories.

Just halting this inventory decline is expected to account for about half of the improvement in first-quarter growth.

A gain of 6 percent in the first quarter, following the 1.7 percent growth in the fourth quarter, would go a long way toward giving the rebound a V-shape rather than the forward-leaning L-shape that economists had expected.

No one expects the first-quarter growth rate to carry over, but most analysts expect GDP will rise at a healthy rate of 3 percent to 4 percent for the rest of the year.