Gross Domestic Product rose slightly in the second period, according to new numbers from the U.S Commerce Department, but dropped steeply from the growth rate earlier in the year.
The news lent strength to analysts’ views that the country may be tipping into recession.
This morning the agency reported that the economy expanded at an annual rate of 0.3% from April to June, up from 0.2% as reported earlier. This is a sharp slowdown from the 1.3% increase in the first period and is the weakest performance in eight years.
Many analysts believe this news may signal the end of the longest economic expansion since the country emerged from the 1990-1991 recession.
While there is a buzz of an impending recession, if it hasn’t arrived already, the talk is at least being tempered by hopes that the slowdown will short-lived. According to some analysts, things will pick up early next year – with possible help from the Federal Reserve on interest rates.
The Fed is expected to cut rates when they meet again on Tuesday.
Newport Communications Senior Economist Jim Haughey agrees with this assessment.
“The events of September 11th have pushed back any recovery about six months” he says. “Once third quarter GDP numbers come out we’ll most likely see slightly negative numbers.”
Haughey says that the Fed’s interest rate cuts earlier this year had begun to have a positive effect before the Sept. 11 terrorist attack. Now, he said, those effects will be delayed.
The news lent strength to analysts’ views that the country may be tipping into recession.
This morning the agency reported that the economy expanded at an annual rate of 0.3% from April to June, up from 0.2% as reported earlier. This is a sharp slowdown from the 1.3% increase in the first period and is the weakest performance in eight years.
Many analysts believe this news may signal the end of the longest economic expansion since the country emerged from the 1990-1991 recession.
While there is a buzz of an impending recession, if it hasn’t arrived already, the talk is at least being tempered by hopes that the slowdown will short-lived. According to some analysts, things will pick up early next year – with possible help from the Federal Reserve on interest rates.
The Fed is expected to cut rates when they meet again on Tuesday.
Newport Communications Senior Economist Jim Haughey agrees with this assessment.
“The events of September 11th have pushed back any recovery about six months” he says. “Once third quarter GDP numbers come out we’ll most likely see slightly negative numbers.”
Haughey says that the Fed’s interest rate cuts earlier this year had begun to have a positive effect before the Sept. 11 terrorist attack. Now, he said, those effects will be delayed.
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