The U.S. economy fell at an annual rate of 1.6 percent in the final three months of last year, a less severe downturn than previously believed, the government said Wednesday.

The Commerce Department's revised estimate of the gross national product - the broadest measure of economic health - served to bolster the Bush administration's view that the current recession will be shorter and more shallow than the average downturn.The department's estimate that the economy shrank at a 1.6 percent rate in the October-December quarter represented an upward revision from two earlier GNP reports.

The unexpected strength came in the country's trade performance, which added $37.7 billion to economic activity in the fourth quarter as exports expanded at a much faster clip than previously believed while imports fell.

Originally, the government put the size of the drop in economic activity at 2.1 percent and then last month that figure was revised slightly to show GNP declining by 2 percent.

Many analysts are looking for GNP to drop at a 2 percent rate in the January-March quarter.

But the unexpected pockets of strength in the fourth quarter did support the view of many economists that the current recession, the country's first in eight years, will probably end in the April-June quarter without inflicting as severe a loss of output or jobs as is typical.

The Bush administration is counting on this outcome in order to keep the domestic economy from becoming an issue in next year's presidential race.

While the administration is forecasting that the GNP will begin growing again in the April-June quarter and will return to healthy growth rates in the final half of this year, many private economists are less optimistic about the recovery.

They believe that economic growth will remain anemic for some time to come because of strains on the financial system from the huge levels of debt being carried by consumers, businesses and the federal government.

The revision to the fourth quarter GNP report left unchanged the country's yearly performance. GNP for the year rose 0.9 percent, the worst showing for the economy since GNP declined 2.5 percent in the recession year of 1982.