commerce department

Spending slowed for the second consecutive month and personal income fell as the effect of economic stimulus checks tapered off and inflation lingered, the Commerce Department said.

The fragile economy improved slightly at the beginning of the year and could grow a bit stronger in the current quarter as extra cash from tax rebates spurs people to buy more.

Still, it's not out of danger yet.

The economy grew at a 1 percent annualized rate in the first quarter, helped in large part by stronger sales of U.S. products overseas, the Commerce Department reported Thursday.

Consumer spending, the main driver for economic growth, is stalling out. The Commerce Department says that after adjusting for inflation, the amount that consumers spent in January was unchanged from what they spent in December.

Outside of the disruptions from Hurricane Katrina, consumer spending has not been this weak since late 2001 _ when the country was struggling to emerge from recession.