TOPICS > Economy

Economic Growth Slowed in Spring

BY Admin  August 29, 2002 at 2:28 PM EDT

The nation’s gross domestic product (GDP) — the broadest assessment of a country’s economic health — grew at an annual rate of 1.1 percent for between April and June, the government report said. The second quarter results mark a sharp drop from the robust five percent growth rate posted for the first three months this year.

The latest GDP figures — the measure of the total value of goods and services produced within the U.S. — did not change from the Commerce Department’s preliminary estimates issued last month.

Officials attributed the modest second quarter growth to an increase in private inventory investment, personal consumption expenditures (PCE), exports and federal government spending. The Commerce Department said the slowdown of real GDP growth stemmed from a substantial increase of imports (which are subtracted in the calculation of GDP), and a downswing in state and local government spending.

Also Thursday, the Labor Department released its own report with further evidence of a lackluster recovery from last year’s recession. For the third consecutive week, new claims for unemployment insurance increased, this week by some 8,000.

Initial applications for state unemployment insurance benefits, considered a key index of the employment market and pace of layoffs, rose above 400,000 for the first time since July 6. The insured unemployment rate was 2.8 percent for the week ending Aug. 17, an increase from last year’s 2.4 percent annual unemployment rate.

In spite of the dour economic data, U.S. stock markets reported mild gains during mid-day trading, notably on the tech-laden Nasdaq index. At 1:30pm EDT, the Nasdaq Composite Index was up 24.72 points to 1339.10, while the Dow Jones industrial average was down 7.21 points to 8686.88.