Washington, Aug 1 - The American economy may be heading out of the woods with new government numbers showing signs of easing recession laying the groundwork for growth in the months ahead. But the job market still remains weak with working people haunted by fear of layoffs.

A Commerce Department report on gross domestic product (GDP) Friday shows America's steep economic downturn eased in the spring, with economic output shrinking at a 1 percent annual rate in the April-through-June period.

That compares with a 6.4 percent rate of decline at the beginning of the year, itself a downward revision from the 5.5 percent decline originally reported for the first quarter.

The improvement came about in part due to an 11 percent boost in federal government spending, along with a more modest decline in exports, down 7 percent, compared with a 30 percent drop in the first quarter.

But the report also points to one of the key threats to expansion as it shows that consumers, who account for about two-thirds of economic activity, are still in lockdown mode, reluctant to make purchases.

The job market remains weak, and even those who still have work are fearful of layoffs and stung by lost stock market and housing wealth. The situation is underscored by a 1.2 percent drop in personal consumption expenditures in the second quarter, which occurred despite a tax cut.