One by one, the engines of the American economy have been losing the power to push the country ahead.

Now, with the economy virtually dead in the water, most economists and analysts believe that, for the moment, there is little government policy-makers or anyone else can do to get it moving again.

Before the Iraqi invasion of Kuwait early last month, it appeared to many economists and business executives that while economic growth had slowed to about 1 percent annually, nothing worse would happen. Barring some unexpected shock, the nation would not slip into its first recession in eight years.

The invasion, however, was just such a shock. It sent oil prices soaring from about $18 a barrel to last week's $32 a barrel, the equivalent in the short run of imposing an $85 billion annual tax on American businesses and households.

Understandably, moods changed. Business executives, already worried about sagging profits and high payments due on the large debts left over from the 1980s, looked at their lackluster order books and became even more cautious.

As they began to lay off workers, the unemployment rate, which had stayed close to 5.3 percent for 18 months, rose to 5.6 percent in August, even though a significant number of people dropped out of the work force.

Consumer confidence also took a sharp drop after Iraq's invasion of Kuwait, according to two major national surveys.

Worried consumers, facing the prospects of lost jobs and higher prices for many goods and services as the impact of more costly oil works its way through the economy, are likely to cut back spending and increase saving.

"It is a very difficult environment," said Lewis Coleman, vice chairman of BankAmerica Corp. "For planning purposes, we assume it shortly will be a recession environment. There is some debate, but we and most businessmen have to assume that."

On the East Coast, Terrance A. Larsen, chairman of CoreStates Financial Corp. in Philadelphia, echoes Coleman's view.

The regional economy of which Philadelphia is part is "flat," like that of the nation as a whole, but it is going to get worse, Larsen said.

"Our economics department believes we will have a recession, starting about now," Larsen said. "I agree with that, and just about everyone I talk to believes that. I think it will be mild, {but} we have to worry about oil prices."

Business customers of CoreStates, Larsen said, are being cautious. "There is not much commercial loan demand. ... They are not expanding. ... They are guarding against being very badly impacted if we have a recession."

Consumer spending is the economy's biggest engine, of course, accounting for about two-thirds of the nation's total demand for goods and services. It rarely falls by much, even during recessions, so the possibility that it may become untracked is significant.

The other engines are sputtering, too. New housing construction has declined for two consecutive years. Over the past year, business investment in new plants and equipment has barely kept pace with inflation.

Government spending has increased, but it is not likely to be the same source of strength in the short run because a weaker economy means lower tax revenue.

The only engine that has done well since the middle of last year is exports.

Against this backdrop there are several reasons analysts question whether policy-makers can do much to bolster a weakening economy.

The Federal Reserve has little leeway to lower short-term interest rates, both because of worsening inflation and the recent weakness of the U.S. dollar, and less power to affect long-term rates, which are more important economically, the analysts argue.

A successful conclusion to negotiations between President Bush and Congress aimed at cutting the federal budget deficit by $50 billion in fiscal 1991 and by $500 billion over the next five years likely would bring down long-term rates only slightly, analysts such as Sam Kahan of Fuji Securities in Chicago predicted.

The problem facing the Federal Reserve is that interest rates in most other industrial nations, including West Germany and Japan, are higher than they are in the United States after each nation's inflation rate is taken into account.

If the Fed were to cut short-term rates sharply to spur economic growth, the move could further discourage foreign investment in U.S. financial markets, reduce the value of the dollar and leave long-term rates no lower than they are now, Kahan said.

BankAmerica's Coleman described the situation this way: "We have got ourselves into an interesting box."

"A good many other industrial countries have higher real interest rates than we do," Coleman said. "That's important. If the world enters into a period of weaker economic growth, they have an option. They can lower interest rates. We can't. ... The people who have to deal with monetary policy have fewer options."

If a budget deal is reached, however, and the savings appear to be substantial, credible and long-term, Fed Chairman Alan Greenspan has said the central bank would respond by reducing short-term rates. Greenspan also has said that it will be up to financial markets to indicate by what happens to long-term rates just how well the deal meets those requirements.

Thus, if Kahan and some other analysts are right, a deal would not bring rates down all that much, at least in the short term.

Although no one can be sure just how much consumers are going to cut spending, there still are a number of forecasters who think the United States will be able to scrape by. And while growth will be very slow -- perhaps with the gross national product, adjusted for inflation, falling slightly in the fourth quarter -- the decline will not be significant enough to carry the recession label.

Roger Brinner of DRI/McGraw-Hill in New York has just such a forecast, which he conditions on some sort of favorable end to the confrontation in the Middle East between Iraq and the United States and its allies that brings oil prices down again no later than early next year. If oil prices do not fall and give a boost to both consumer confidence and real incomes, the slump will deepen, he predicted.

If there is not enough of a downturn to be considered a full recession, the period of extended slow growth or no growth will take its toll. Unemployment is sure to rise further, corporate profits will be squeezed even harder and federal, state and local government revenue will sag, leading to higher taxes and cuts in services.

The whole process, however, feeds upon itself as new caution in one part of the economy ripples through to other sectors. Fortunately, most economists said, any downturn is likely to be mild because the major cause for the sharp contraction of production early in a recession -- a large supply of unsold goods -- is not present this time.

This means that stores and factories can't stop ordering new goods and use up what they have stored in their warehouses. Even if sales are slow, they still will have to order some new items.

Still, businesses are feeling the pinch. Van C. Campbell, vice chairman of finance and administration for Corning Inc. in Corning, N.Y., said his company's sales of dinnerware and other products fell off earlier this year not because consumers were buying less but because Corning's retail customers wanted to hold down their inventories.

"Our sales are down because between us and the consumer there is a lot less inventory than six months ago," Campbell said.

At the same time, Corning has lost other sales because the company has found some of the businesses to which it sells unable to pay bills. Credit to these customers has been cut back by Corning.

It is through developments such as those that the effects of slower growth or outright recession spread through the economy.

If consumers reduce their spending as expected, the wholesalers and retailers to which companies like Corning sells will order less and Corning will cut back, too. Ultimately, employees and shareholders will see their incomes affected as well.

In the end, the key to the economic outlook remains oil prices. The Federal Reserve sought the initial slowdown in economic growth to combat inflation. The oil-price shock now stands to turn the slowdown into something more.

If oil prices again were to fall, slow growth probably would resume, said Charles L. Schultze of the Brookings Institution. Otherwise, "The odds are 70-30 that we will have a recession," he said.

A recent report from analysts at Kidder, Peabody & Co. put it this way: "If oil remains above $30 a barrel, a recession will begin in the fourth quarter and last through the first half of 1991. ... If oil prices retreat to about $25 a barrel, the economy will continue to sustain a slow-growth pattern."