For consumers, whose confidence has been rattled by the housing and credit problems, much turns on whether employment conditions continue to deteriorate.
The economy lost 4,000 jobs last month, the first decline in four years. The unemployment rate, now at 4.6 percent, is expected to climb close to 5 percent by the end of the year. A softening job market eventually will probably mean slower wage growth.
Howard Chernick, economic professor at Hunter College, doesn't think the Fed's rate cut will make people rush to the malls.
"Consumer spending is influenced by employment and wages," Chernick said. "Aside from the euphoria some might now feel, I don't think there is going to be a big effect."
It will take months for the Fed's rate cut to ripple through the economy, with the hope that it will bolster activity.
Analysts expect the economy to slow to a rate of about 2 percent in the current quarter. That would be just half the pace of the previous three months.
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