A government report released Thursday suggests the recession may be waning, as positive signs in housing and business expenditures have slowed the decline in the U.S. gross domestic product. The Commerce Department said GDP fell at an annual rate of 1% in the second quarter of 2009, a better picture than most economists had predicted. “The recession looks to have largely bottomed in the spring,” Joel Naroff, president of Naroff Economic Advisors, told The Associated Press. “Businesses have made most of the adjustments they needed to make, and that will set up the economy to resume growing in the summer.” Improvement in the housing market is a major factor in the economy’s rosier outlook. Reports this week showed that new-home sales rose in June, the fourth such rise in six months, as more buyers become convinced that a bottom in home prices is nearing. But real estate’s recovery is not yet a sure thing, analysts say, since consumer spending, wages and employment are likely to remain wobbly for the next few quarters.

“We’re going from recession to recovery, but at least early on, it’s not going to feel like one,” Mark Zandi, the chief economist at Moody’s Economy.com, told The New York Times. “For economists, this is a seminal part in the business cycle, but for most Americans, it won’t mean much.”