GDP, Jobless-Claim Data Consistent With End Of U.S. Recession

By John S. McClenahen Both revised data for fourth-quarter 2001 GDP and new numbers for initial unemployment claims suggest that the recession that began in March 2001 is over. Based on more complete data than it originally had, the U.S. Commerce Department's Bureau of Economic Analysis (BEA) now says that inflation-adjusted GDP grew at an annual rate of 1.4% during the final calendar quarter of 2001. BEA's initial estimate showed only 0.2% growth. Greater consumer spending, higher government outlays and a smaller decrease in U.S. exports account for the difference. Meanwhile, initial jobless claims of 378,000 for the week ending Feb. 23, although higher than the sharply downward revised 361,000 of the previous week, did not fulfill the forecast of 383,000. "We expect next week's February payroll employment report to show a modest gain of 25,000 for the month," says Gerald D. Cohen, a senior economist at Merrill Lynch & Co., New York. However, "the unemployment rate, which lags the cycle, should creep up to 5.8% from January's 5.6%," he says.

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