Sept. 8 (Bloomberg) -- Pauline, the heroine of the 1914 classic silent-film serial, was threatened with death in 20 weekly episodes, escaping narrowly each time. One can only hope the U.S. economy won't have to face so many perils before the risk of recession fades and it gets back on a solid growth track.

The latest is whether the continuing loss of payroll jobs -- 84,000 last month and 605,000 so far this year -- will limit income gains and hurt consumer spending enough to start a spiral into recession.

The monthly losses, as large as they are, are only a small fraction of those usually incurred during recessions. This year's decline has cut total payroll employment by less than half a percent, and the impact on workers' incomes has been small.

Employers have managed to produce more with less labor. The gross domestic product increased at a 3.3 percent annual rate in the second quarter at the same time the number of jobs fell and the unemployment rate rose.

The result was a spectacular jump in productivity. On Aug. 4, the Labor Department said output per hour worked climbed at a 4.3 percent rate this spring at non-farm businesses. Production was up 3.4 percent and hours worked dropped 0.8 percent.

Some of the increase in GDP was due to the tax rebates many households received as part of the economic-stimulus package enacted earlier in the year. More importantly, a decline in the value of the dollar contributed to a surge in U.S. exports that provided a boost to the economy.

Housing Crash

Meanwhile, the drag on growth from the crash in the housing market was only about half as great as in the previous three quarters.

The bursting of the housing bubble might, by itself, have been enough to trigger a recession. However, the resilient economy looked like it was weathering that peril when overreaching by many banks and securities firms helped produce the worst crisis in financial markets since the Great Depression.

As the crisis deepened, yet another peril appeared: Prices for a wide range of commodities, including oil and food, skyrocketed. Retail prices for gasoline, milk, bread and other types of food took off, denting consumers' pocketbooks.

Gasoline and diesel-fuel costs soared to more than $4 a gallon, wiping out a large share of the market for sport-utility vehicles and pickup trucks.

None of these threats has disappeared, and economic forecasters are divided over whether this extended period of slow growth and job loss is going to turn into something worse.

Another Gain

Economic growth probably will register another small gain in the July-September quarter, on the order of 1 percent to 2 percent. The fourth quarter might be even weaker, though it could provide a positive surprise.

One big plus is the recent drop in a broad array of commodity prices, including most of all, oil. On Aug. 5, crude oil for October delivery fell to about $106 on the New York Mercantile Exchange, down 28 percent from its peak of more than $147 in mid-July.

Gasoline prices haven't fallen that much, though in the week ended Sept. 5 they were down about 44 cents a gallon to $3.67, a 10 percent drop over a two-month period.

That big decline may be tempering a key source of this year's economic weakness, a large drop in new-car and truck sales. For instance, General Motors Corp. sales are down 18 percent this year from 2007. And falling consumer purchases of motor vehicles and parts clipped about 0.6 percentage point off second-quarter GDP growth.

Auto Sales

Price-cutting at GM -- and lower gasoline prices -- helped spur sales of domestically produced vehicles last month, a pleasant surprise for the beleaguered industry.

``I'm optimistic, the industry did tick up in the month of August,'' said Mark LaNeve, GM's head of North American sales and marketing. ``It just felt better. At some point, we hit the bottom of this market. We won't know until it's over.''

Like housing, the most important thing regarding motor- vehicle sales is that they stop falling, so they are no longer a drag on GDP, as they have been since mid-2007. Maybe that's happening.

The question at this point is how all these interconnected forces play out.

The financial crisis has eased though hardly disappeared. Some types of credit are hard to get and many lending institutions have had such large losses that they are reluctant to grant new loans.

There are ever-more signs that housing is stabilizing even as home prices fall more in some important markets. The drag on GDP probably will shrink more and disappear by early next year.

With growth slowing in many parts of the world, including Europe, commodity prices ought to retreat a good deal more, which will ease inflation pressures. Unfortunately, those pressures will still be great enough that the Federal Reserve won't be in a position to reduce its 2 percent overnight lending rate target.

By the middle of next year, perhaps sooner, if things go as well as they did for Pauline, the U.S. economy should be on a solid footing again.

(John M. Berry is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: John M. Berry in Washington at jberry5@bloomberg.net

Last Updated: September 8, 2008 03:28 EDT