WASHINGTON -- The economy, which stubbed its toe in the final quarter of 2005, is probably back on firm footing in the first quarter of this year despite somewhat skittish consumers.
After digesting the latest batch of economic reports, released yesterday, analysts predicted that economic activity is rebounding nicely in the January-to-March quarter and will grow by at least a 4.5 percent rate. For all of 2006, the economy will log another year of solid, though slower growth, they said.
But on Wall Street, the economic news unnerved investors and sent stocks tumbling. The Dow Jones lost 104.14 points to close at 10,993.41.
The economy ended 2005 on wobbly footing, expanding at an annual rate of 1.6 percent in the October-December quarter, the worst showing in three years, the Commerce Department said.
While slightly better than the first estimate of a 1.1 percent growth rate for the quarter, the new figure still showed a loss of momentum from the third quarter's brisk 4.1 percent pace.
Another report showed consumers' confidence in the economy dipped in February to 101.7, from 106.8 in January, the Conference Board said. People are anxious about economic conditions over the next six months.
''Consumers remained optimistic about their present situation, but going forward, sentiment is a bit shaky," said Sherry Cooper, chief economist at BMO Nesbitt Burns.
Other recent barometers suggested the economy did start bouncing back at the beginning of this year. The nation's unemployment rate dropped to 4.7 percent in January, the lowest in 4.5 years.