GDP, Jobless Claims Send Mixed Signals

By John S. McClenahen The U.S. economy grew even faster in the fourth quarter of last year than previous data indicated. Real gross domestic product -- the value of goods and services adjusted for the effects of inflation -- rose at a 1.7% annual rate from October through December 2001, says the Bureau of Economic Analysis (BEA), a unit of the U.S. Commerce Department. The BEA's initial estimate was 0.2% growth, but that figure was revised last month to 1.4%. In contrast, real GDP in the third quarter of last year fell at an annual rate of 1.3%. Growth estimates for the first quarter of 2002 are as high as an annual rate of 6%. "A robust recovery is now underway," claims Bruce Steinberg, chief economist at Merrill Lynch & Co., New York. He believes GDP is growing at a 6% rate in the current quarter -- and is forecasting a fourth-quarter 2001 to fourth-quarter 2002 advance in real GDP of more than 4.5%. Meanwhile, initial unemployment claims for the week ending March 23 did not drift downward as many economists had expected. Jobless claims rose to 394,000, an increase of 18,000 from the previous week, according to the U.S. Labor Department's Employment & Training Administration. Its four-week moving average for initial claims was 383,500 for the week ending March 23, some 3,250 higher the previous week's 380,250. However, Merrill Lynch's Steinberg says with weekly numbers below 400,000, jobless claims data still suggest a stabilizing U.S. labor market. And he expects the April 5th U.S. employment report from the Labor Department to show that 25,000 jobs were added during March.

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