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The deepening housing slump brought U.S. growth to a near standstill in the fourth quarter and has now probably tipped the world's biggest economy into a recession, economists said ahead of a government report today.

Gross domestic product advanced at a 0.6 percent annual rate in the last three months of 2007, matching the weakest pace in five years, according to the median projection of economists surveyed by Bloomberg News. The economy grew at a 4.9 percent pace in last year's third quarter.

So far this year, consumer spending has stalled, and business investment and commercial construction have joined home building in decline. The Federal Reserve's interest-rate reductions and the government's rebate checks won't influence the economy soon enough to sustain the six-year expansion.

“We're getting a picture of the economy that looks like what you would expect for a recession,'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York.

The Commerce Department is scheduled to release the GDP report at 8:30 a.m. in Washington. The 70 estimates in the Bloomberg News survey ranged from no growth to 1 percent. The figures are the second revision of data first issued in January and will, for the first time, include estimates on corporate profits.

A report from the Labor Department may show initial jobless claims last week held near the highest level in two months. Economists surveyed by Bloomberg News forecast applications for jobless benefits would fall to 370,000, from 378,000 the prior week.

Economists project the total number of Americans on benefit rolls rose to the highest level since August 2004, according to the survey median.

Jobs, Inflation

The weakening labor market, combined with higher food and energy costs and the ongoing slump in housing, has unnerved consumers. The Conference Board said March 25 that its confidence index fell a five-year low.

“The consumer is under extreme stress,'' AutoNation Inc. Chief Executive Officer Michael Jackson said in a Bloomberg Television interview on March 19. AutoNation is the largest publicly traded U.S. car dealer.

The dimmer outlook may hurt consumer spending, which has continued to slow after a projected 1.9 percent increase at an annual rate last quarter. Retail sales fell 0.6 percent in February, according to figures from the Commerce Department, the second decline in three months fast cash online.

Spending Forecast

A report tomorrow on spending for February will help economists firm up forecasts. Consumer spending may grow at an annual rate of 0.5 percent from January through March, the slowest pace since the 1991 recession, according to the median estimate of economists surveyed earlier this month.

“Growth in consumer spending has slowed and labor markets have softened,'' the Fed said last week after it cut the key rate to 2.25 percent. “The outlook for economic activity has weakened further.''

Fed policy makers have lowered the benchmark interest rate and pumped money into the banking system to try to make it cheaper and easier for Americans to borrow and spend.

The central bank earlier this month carried out its first emergency weekend action in almost three decades and became the lender of last resort to the biggest dealers in government bonds. Two days later, it reduced the target interest rate by three-quarters of a point and acknowledged risks had increased.

Businesses are also cutting back. Orders for durable goods unexpectedly fell in February, led by a slump in demand for machinery, the Commerce Department reported yesterday.

Growth Estimates

Economists at Morgan Stanley in New York projected the economy will contract at a 0.7 percent pace this quarter following the durables report.

“The weakness coming from consumer and business spending will be ugly,'' said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis.

The downturn in home building is also filtering through to other types of construction. Spending on building projects in January fell by the most in 14 years, depressed by declines in construction of hotels and power plants, according to a report from Commerce earlier this month.

Today's GDP revisions may show the rest of the economy would have already contracted last quarter without a boost from exports. Last month's estimate showed that excluding the improvement in trade, the economy would have shrunk at a 0.3 percent annual pace, the first decline since the last recession in 2001.

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