Cross Timbers Business Report, Volume 17, Number 3, Spring 2004 Page: 1
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Cross Timbers Business Report
Published by the College of Business Administration, Tarleton State University
Articles by Members of Delta Mu Delta, William L. Beaty, EditorVolume 17, No.3
Spring 2004
First Quarter GDP Posts a Healthy Rise
By Kade MachenThe economy maintained a healthy growth rate
during the first quarter of 2004, as gross domestic prod-
uct, a measure of all U.S. produced goods and services,
increased at an annual rate of 4.1 percent. This advance
was identical to the growth rate exhibited the previous
quarter. The growth rate for the January through March
period was below the expected growth of 5 percent
value that economists had forecast, but it was well
above the 3.1 percent average expansion for the past
thirty years. Last quarter's advance was led by strong
spending for personal consumption, equipment and
software purchases, inventory investment, and exports.
An increase in government spending and a decrease in
imports also contributed to this increase.
Consumer purchases, which account for two-thirds
of total economic activity, gained 3.8 percent in the first
quarter, following a 3.2 percent advance in the previous
period. The purchase of durable goods, items that
should last three or more years, decreased slightly, but
advances in nondurable goods and services expenditures
made up for this weakness.
Business investment advanced by 7.2 percent, fol-
lowing a 10.9 percent increase the previous quarter.
Federal government spending increased 10.1 percent
this quarter compared to a slight 0.7 percent gain in the
prior period. State and local government spending de-
clined by 2.6 percent. Exports rose by 3.2 percent in the
first quarter, while imports only increased by 2.0 per-
cent. This increase in net exports was supported by aweaker U.S. dollar and stronger foreign demand for U.S.
products.
Some analysts estimate the second quarter's output
level will increase somewhere in the 4.5 to 5 percent
range. The second half of 2004 may see a growth of only
4 percent, but this rate is still healthy. Alan Greenspan,
the Federal Reserve Chairman, recently said "Looking
forward, the prospects for sustaining solid economic
growth in the period ahead are good."
Changes in Real GDP
Annual Percentage Rates
10
8
8
6
4.6
4.1 4.1
4 3.3 3.1
1.9 _ _ 2
2 1.3
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2002 2003 2004
Source: Bureau of Economic Analysis, U. S. Department of Commerce
The Bureau of Labor Analysis, a branch of the U.S.
Department of Commerce collects and reports national
output data on a quarterly basis. Preliminary estimates
are subject to later revision.
Kade Machen is a graduating finance major at Tarleton
State University.Labor Market Statistics Indicate Expanding Economy
By Aaron JohnsonDuring the month of March, The Wall Street Jour-
nal reported U.S. employers hired workers at the fastest
rate in four years. Nonfarm business payrolls grew by
308,000 jobs, a rate significantly higher than the
120,000 jobs projected by many economists. Even so,
the unemployment rate increased by a tenth of a per-
centage point to 5.7 percent. This increase can be at-
tributed to the emergence of job seekers renewing their
searches, causing the labor force to grow slightly faster
than those individuals who are actually employed. Ste-
ven Wood, chief economist at Insight Economics, writes"this is the most hopeful sign that we have had that the
economic expansion is becoming self-sustaining."
The latest figures from the Bureau of Labor Statistics
show unemployment rose from 5.6 percent in February to
5.7 percent in March. The first quarter average for 2004,
listed at 5.6 percent, is slightly lower than the 5.8 percent
posted in 2003.
In Texas, employment gains in Trade, Transporta-
tion, and Utilities, Leisure and Hospitality, and Education
and Health Services helped push the state's unemploy-
ment rate from 6.3 percent in January to 6.1 percent in
February to 6.2 percent in March. Unemployment for thev
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Tarleton State University. College of Business Administration. Cross Timbers Business Report, Volume 17, Number 3, Spring 2004, periodical, Spring 2004; Stephenville, Texas. (https://texashistory.unt.edu/ark:/67531/metapth284665/m1/1/: accessed April 23, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Tarleton State University.