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A modestly upbeat reading of U.S. economic performance is adding to hopes that the initial phase of a recovery could be underway.  

The U.S. economy has been contracting for more than a year, and last quarter was no exception.  An initial estimate of the April through June period showed negative growth at a 1 percent annual rate, which was an improvement over previous quarters that had seen drops as high as 5.4 percent.

Now, in its final calculation, the U.S. Commerce Department has revised the second quarter figure to a more modest .7 percent annualized dip in gross domestic product (GDP).

Economists welcomed the news, saying it bolsters projections that a recovery might already have begun. 

"GDP numbers were a little bit better than expected.  Most of us [economists] thought there would be a slight downward revision instead of a slight upward revision.  We are expecting a pretty strong positive [growth] number for the third quarter, not just in the U.S., but [also] around the world," said David Weiss, Chief Economist at the credit rating agency, Standard and Poor's.

The upbeat sentiment was tempered, however, by a drop in a regional U.S. economic indicator.  The Chicago Purchasing Managers Index fell unexpectedly -- a sign of continued woes in U.S. manufacturing.

Overall, many economists expect an eventual economic recovery to be slow, with U.S. unemployment remaining high for months to come.  The jobless rate stands at 9.7 percent and could edge higher, even if the overall economy returns to positive growth.