The latest annualized gross domestic product figures released yesterday by the US Commerce Department suggest a marginal growth of 0.2 percent in 2001 – virtually a standstill but an improvement on the decline to zero percent expected by a consensus of economists. The latest figure has triggered hope that a full-blown recession can be avoided.
Other data accompanying the GDP statistics suggests a slowing of the decline in corporate profits. These, says the Commerce Department, indicate that profitability in the broader economy is in more robust health than that of the major stock market indices.
The annualized figures are updated monthly and the data for September are awaited with some tension, albeit seemingly not by President Bush who emerged yesterday from his month-long vacation in San Antonio, to observe that the awaited recovery seemed “very slow in coming”.
A more constructive viewpoint was expressed by Princeton University economist and National Bureau of Economic Research committee member Ben Bernanke, who opined: “I think there's a good chance we'll dodge the bullet this time. The decline is most pronounced in the industrial and high-tech sectors and we're still seeing a really strong labor market and personal income growth and so on. I'm not a forecaster, but so far it doesn't show the weakness or pervasiveness of a classic recession.”
Goldman Sachs economist Jan Hatzius agreed: “In terms of the rates of decline, the worst probably is past.”
News source: Wall Street Journal