More Data Point to Weak Growth for US Economy

02 September 2002

America’s lackluster recovery from recession is evident in yet more surveys that dash hopes of a swift upturn.

Optimism was high at the end of the first quarter, during which US gross domestic product surged 5%. However, three months down the line things are not so rosy, with the Commerce Department revealing that GDP growth for the second quarter was just 1.1%.

Growth in consumer spending also slowed, falling from 3.1% in Q1 to 1.9%. However, spend has not been hit as hard as feared in light of confidence-sapping corporate scandals and stock market chaos.

Separate figures from the Labor Department also point to an uncertain outlook, as new claims for unemployment benefits increased by 8,000 the week before last, hitting 403,000. Analysts had been expecting a fall.

Such a sluggish turnaround is reflected in business profits, which continue to defy predictions of a rapid rebound.

The Commerce Department’s report showed that total pre-tax corporate takings in the second quarter were down 1.7% on the previous three months, following a drop of the same margin in Q1. Nevertheless, profits were up 8.7% compared with Q2 2001, in part due to gains at the end of last year.

Data sourced from: multiple sources; additional content by WARC staff