What Uncle Sam Gives in Rebates, OPEC Takes, Stalling Economy

Wal-Mart and OPEC are battling for the tax rebates the U.S. government began handing out last week. The result may be a draw for the economy.

While consumers might spend enough of the $117 billion stimulus at retailers to keep the U.S. economy afloat in the months ahead, the boost from their purchases will be diluted by gasoline prices at $3.62 a gallon and rising.

The upshot: The U.S. might avoid an outright contraction in the second quarter and still be saddled with sluggish growth typical of Europe, which expanded at a 0.9 percent annual pace in the six quarters following a 2001 recession.

``It feels like the U.S. is taking a European holiday,'' says Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York. ``We're in for a long period of growth hugging 1 percent.''

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