A recession without contraction?

The economy will perform a neat trick this year, experts predict: fall into recession without contracting. That hasn't happened since the government began tracking quarterly growth of gross domestic product (GDP) in 1947.

"Remarkably, the economy has been able, barely, to keep its head above water despite all the negative shocks," says Josh Feinman, DB Advisors' chief economist.

While many believe a recession indicates a contraction in GDP, the National Bureau of Economic Research, known as the arbiter of recessions, merely looks for "a significant decline in economic activity" lasting more than a few months. It may appear in GDP, income or other measures.

GDP limped along at a 0.9 percent rate in the first quarter. But the Federal Reserve has slashed interest rates and eased credit-market tightness. Tax-rebate checks also will likely boost consumer spending this summer. Plus, the weak dollar is fueling exports.

Two recent surveys — from the National Association for Business Economics and the Fed of Philadelphia — see growth, albeit mild, through 2008.