GDP growth revised upward

June 27, 2002
The gross domestic product (GDP) bounced back from last year's recession by growing at an annual rate of 6.1% in the first quarter, the strongest showing in more than two years. The Commerce Dept. first estimated that GDP for the period grew at a 5.8% pace and then revised that down to 5.6% growth rate a month ago. The first-quarter economic growth received its biggest boost from slower inventory
The gross domestic product (GDP) bounced back from last year's recession by growing at an annual rate of 6.1% in the first quarter, the strongest showing in more than two years.

The Commerce Dept. first estimated that GDP for the period grew at a 5.8% pace and then revised that down to 5.6% growth rate a month ago.

The first-quarter economic growth received its biggest boost from slower inventory liquidation by businesses, which added 3.39 percentage points to GDP. That's a turnaround from the 2.16 percentage-point reduction from GDP in the fourth quarter, a key source of the economy's weakness.

Consumers also gave a lift to the economy by increasing spending at a 3.3% rate, though it was down from a 6.1% pace in the fourth quarter.

Citing uncertainties about the recovery's vitality, Fed policy-makers left short-term interest rates at 40-year lows Wednesday, the fourth time this year they opted to leave the rates be.

If interest rates stay low, analysts say consumers might be motivated to spend more and businesses motivated to boost investment in new plants and equipment, which are both crucial ingredients in the recovery.

Economists are also worried that that fallout from the WorldCom accounting scandal could ruin consumer confidence and hamper their willingness to spend. It could also make companies more cautious about big spending commitments, including capital investments and hiring.

About the Author

Tim Parry

Sponsored Recommendations

Tackling the Tech Shortage: Lessons in Recruiting Talent and Reducing Turnover

Discover innovative strategies for recruiting and retaining tech talent in the trucking industry at our April 16th webinar, where experts will share insights on competitive pay...

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

How Electric Vehicles Help You Prolong the Life of Your Fleet

Before adopting electric vehicles for commercial/government fleets, prioritize cost inquiries. Maintenance is essential; understand the upkeep of EV fleets. Here’s what you need...

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!