Cross Timbers Business Report, Volume 16, Number 4, Summer 2003 Page: 1
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Cross Timbers Business Report
Published by Students in Free Enterprise of Tarleton State University
Articles Written by Jared McComis; Edited by William L. BeatyVolume 16, No.4
Late Summer 2003
Output Growth Strengthens in Second Quarter
Following disappointing growth rates in the previous
two quarters, the economy's output level expanded at an
annual rate of 3.1 percent between April and June 2003,
according to the Department of Commerce. Contributing to
the overall increase in real gross domestic product (GDP)
was the largest jump in defense spending since the Korean
War and significant increases in business and consumer
outlays.
Changes in Real GDP
Annual Percentage Rates
s i
4
3
2 121.4 1.4
0
-1
-2
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1i Q2
I 2001 I 2002 I 2003
Source: Bureau of Economic Analysis, U. S. Department of Commerce
Because of the war in Iraq, spending by the Federal
Government increased at a 23.4 percent annual rate, the
largest rise since 1967, while defense spending surged at a45.9 percent rate. Although spending by state and local
governments showed a slight decline, the federal spending
was more than enough to offset this difference. Overall, the
increase in government spending added 1.4 percentage
points to GDP growth in the second quarter.
According to the Wall Street Journal, consumer spend-
ing rose at a 3.8 percent annual rate during the second quar-
ter after rising only 2 percent in the first. Spending on non-
durable goods rose only a minute 0.1 percent, but spending
on durable goods experienced a dramatic 24.1 percent in-
crease after falling 2 percent in the first quarter. Durable
goods are items such as cars and appliances, which are ex-
pected to last more than three years.
While GDP exhibited strong growth during the second
quarter, purchases from abroad rose at an incredible rate.
Imports"increased by 7.7 percent while exports declined by
1.2 percent. A gain in imports and a decrease in exports
have a negative effect on the economy's domestic output
measure.
Real gross domestic product measures the inflation-
adjusted value of all goods and services produced in the
United States. The Department of Commerce issues GDP
figures on a quarterly basis, and preliminary estimates are
subject to revision.Labor Markets Remain Weak
The United States Bureau of Labor Statistics and
Texas Workforce commission recently released unem-
ployment statistics for the months of April, May, and June
2003. These figures reflect labor market conditions in the
United States, Texas, and Cross Timbers counties. The
numbers for the second quarter indicate rising unemploy-
ment rates in most areas.
The United States jobless rate went from 5.8 percent at
the end of the first quarter to 6.0 percent in April, 6.1 per-
cent in May, and 6.4 percent in June. The 6.0 percent aver-
age for the first half of 2003 is 0.3 percent higher than the
jobless rate average for the same six months of 2002. This
average is also higher than the 5 percent jobless rate that
indicates a stable and growing economy.
The Texas unemployment rate fluctuated dramatically
over the second quarter. The second quarter jobless figure
started out at 6.6 percent in April, jumped to 6.8 percent in
May, and then eased back to 6.4 percent in June. Althoughthe monthly jobless rate has risen and fallen over the last
six months, the average unemployment rate has remained
at 6.6 percent since March of this year. This value is
slightly above the 6.3 percent average for the first six
months of 2002.
Even though the unemployment rates for the Cross
Timber Counties were generally below the values for Texas
and the United States, they still exhibited a rising trend
when compared to the year before. For Erath County the
statistics started at 2.8 percent for the month of April but
increased to 3.3 percent by the end of the quarter. The
January-June average jobless rate for Erath County was 3.0
percent. This figure is 0.3 percent higher than the same
period last year.
Bosque County experienced the highest average job-
less rate of any Cross Timbers county during the first six
months of this year. The unemployment rate jumped from
5.8 percent in April to 6.3 percent in May to 7.6 percent in
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Tarleton State University. Students in Free Enterprise. Cross Timbers Business Report, Volume 16, Number 4, Summer 2003, periodical, Summer 2003; Stephenville, Texas. (https://texashistory.unt.edu/ark:/67531/metapth298232/m1/1/: accessed April 23, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Tarleton State University.