U.S. consumer spending will falter after a first-quarter spurt and recover only gradually toward the end of the year, a monthly Bloomberg News survey showed. Purchases will drop at a 0.5 percent pace from April to June and grow at an average 0.9 percent rate the next six months, according to the median of 51 projections in a survey taken from March 30 to April 8. The estimated 0.5 percent first- quarter gain would break the longest slide since 1991. Soaring unemployment and tattered household finances are forcing Americans to pay off debt and save more, preventing the economy from gaining traction. What’s shaping up to be the worst global recession in the postwar era means companies are also cutting back and foreigners are buying fewer U.S.-made goods. “We are going to have an economic recovery, but it won’t feel like one most of us are used to,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. “The positive consumer numbers are being offset by a little weaker business investment and a lot weaker numbers on exports.” Unemployment will end the year at 9.5 percent, a percentage point more than last month’s 25-year high of 8.5 percent, according to the survey median. Employers cut payrolls by 663,000 workers last month, and 5.1 million Americans have lost their jobs since the recession began in December 2007, the Labor Department reported last week. Subdued spending will constrain the economy for much of the year. Gross domestic product fell at a 5 percent annual pace last quarter and will drop at a 2 percent rate in the following three months, according to the survey. The economy will then grow at a 0.4 percent pace in the third quarter, and only improve at a 1.5 percent rate in the last three months of 2009. Worst Since 1946 For the entire year, the world’s largest economy is projected to shrink 2.5 percent, the same as estimated last month and the worst performance since 1946. “We’re ever so slowly climbing out of the depths of an extremely deep recession,” said Richard Yamarone, chief economist at Argus Research in New York. “You have stimulus in the pipeline and energy prices that are not restrictive.” A gallon of regular gasoline at the pump has averaged $1.90 so far this year, down from a record $4.11 in July 2008, according to AAA, the nation’s biggest motoring association. The drop has given consumers extra cash even as the loss of jobs causes incomes to soften. Lots of Stimulus President Barack Obama signed into law a $787 billion stimulus plan on Feb. 17 that included tax cuts and spending on infrastructure projects that he pledged will create or save 3.5 million jobs. The Treasury Department is also moving to repair the damaged financial system and lower record foreclosures, while the Federal Reserve is flooding markets with cash to boost borrowing and spending. Fed Chairman Ben S. Bernanke last month said unemployment could top 10 percent in a worst-case scenario. Job cuts are spreading from manufacturers such as General Motors Corp. and Caterpillar Inc. to health-care operators and state and federal agencies. The central bank has brought its key lending rate close to zero and is buying Treasuries to push down borrowing costs and boost purchases of houses and cars. Lower interest rates on mortgages and business loans led Bernanke to tell CBS Corp.’s “60 Minutes” on March 15 that he sees “green shoots” in some financial markets, and that the pace of economic decline “will begin to moderate.” The threat of deflation, or an extended drop in prices, will lessen as the economy begins to grow again. Consumer prices will rise 1.2 percent this year, according to forecasts, after being almost stagnant in recent months. Lid on Prices Wal-Mart Stores Inc. is among merchants keeping inflation low. The world’s biggest retailer plans to sell more than 80 new products, including thin-crust pizza, under its store brand to draw in bargain hunters. Some economists fear the surge in government spending and the trillions of dollars the Fed has pumped into financial markets will eventually cause prices to flare. “Right now, it is too early to worry about inflation,” said Wachovia’s Silvia. “I am concerned longer term. Both Obama and Bernanke are going to be severely challenged to pull all this stimulus in once the economy starts to fully recover in the middle of 2010 and early 2011.”

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