WASHINGTON - The economy nearly sputtered out at the end of the year and is probably faring even worse now amid continuing housing, credit and financial crises.
The Commerce Department reported Thursday that gross domestic product increased at a feeble 0.6 percent annual rate in the October-to-December quarter. The reading — unchanged from a previous estimate a month ago — provided stark evidence of just how much the economy has weakened. In the prior quarter, the economy clocked in at a sizzling 4.9 percent growth rate.
The gross domestic product (GDP) measures the value of all goods and services produced in the United States and is the best barometer of the country’s economic health.
Many economists say they believe growth in the current January-to-March quarter will be even weaker than the 0.6 percent figure of the previous quarter. A growing number also say the economy may actually be shrinking now. Under one rough rule, the economy needs to contract for six straight months to be considered in a recession. The government will release its estimate for first-quarter GDP in late April.
In another report, fewer people signed up for unemployment benefits last week, although that didn’t change the broader picture of a deteriorating jobs market. The Labor Department said jobless claims fell by 9,000 to 366,000, a better showing than many economists were forecasting. Still, unemployment is expected to rise this year given all the problems clobbering the economy.
The newly released fourth-quarter GDP figure matched analysts’ expectations.
My guess is that we are now probably in the recession that everyone is talking about. I seriously doubt that the tax rebate checks that the Bush administration is now handing out to consumers will be spent on purchasing more goods. More than likely, those checks will go to paying down bills and debt. Then again, I could be wrong.
No comments:
Post a Comment