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U.S. Economy Isn't Poised To Spring Forward

By John S. McClenahen As the second quarter of 2001 begins, consumer confidence in the U.S. economy remains depressed and manufacturing is basically in recession. Business inventories are still being worked down. Layoffs continue, including 7,600 U.S. jobs at Delphi Automotive Systems Corp. The U.S. Commerce Dept.'s first estimate of GDP growth in the calendar quarter just ended is due Apr. 27. Meanwhile, the unevenness of the U.S. economic downturn is illustrated by the fact that consumer and construction spending are growing while capital goods outlays are not. "So far the level of initial unemployment claims is consistent with positive job growth, meaning that the [overall] economy is not in recession," contends Bruce Steinberg, chief economist at Merrill Lynch & Co., New York. "But the [Federal Reserve] clearly needs to be easing [interest rates] more aggressively."

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