Cross Timbers Business Report, Volume 15, Number 3, Spring 2002 Page: 1
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Cross Timbers Business Report
Published by Students in Free Enterprise of Tarleton State University
Edited by Barbara Offor
Volume 15, No. 3
Economists Question Vigor of First Quarter Output Surge
By Kurtis Gross
Real gross domestic product, the inflation-adjusted
measure of the nation's output of goods and services rose
by an impressive 5.7 percent in the first quarter of 2002.
This movement follows a modest 1.6 percent rise in the
previous quarter. This is the most noteworthy quarterly
gain since the second period of 2000, when growth peaked
at 5.6 percent. Last quarter's rise follows 2001's weak
growth of 1.2 percent in real GDP, which was the worst
yearly performance since the 1991 recession. Economists
predicted the end of the economic slowdown that began in
March of 2001, but few expected the rate of growth to hit
this blistering pace.
The jump in GDP was attributed, in large part to busi-
nesses slowing their cuts to investment spending. Busi-
nesses eased their reduction of inventories, which could
portend increased sales and production as well as the future
restoration of jobs and profits.
Consumer spending on durable goods fell by 8 percent
in the first quarter. These sales, fueled by strong financing
incentives for automobiles paced the fourth quarter rally in
2001. The loss in durable goods outlays was offset by an
8.4 percent increase in sale of non-durable goods, a 3.8
percent increase in service-related sales, and a 15.7 percent
increase in home purchases. Preliminary reports indicate
that falling consumer confidence may drastically slow con-
sumption spending in the second quarter.
Government outlays also played a large part last quar-
ter's output growth. Defense spending saw a 20 percent
jump. This the largest increase since the Vietnam War.
Changes in Real GDP
Annual Percentage Rates
Q1 Q2 Q3 Q4 Q1 Q2 03 Q4 Q1
2000 I 2001 2002 1
Source: Bureau of Economic Analysis, U. S. Department of Commerce
Net exports reduced growth by 1.2 percent as consum-
ers increased their purchases of foreign made goods.
The Department of Commerce issues reports on the
nation's output on a quarterly basis. All data are adjusted
for normal seasonal variations.
Kurtis Gross is a senior majoring in economics at Tarleton
Jobless Figures Hint at Improvement in Labor Markets
By Jared Lovell
Data collected by the U.S Bureau of Labor Statistics
and the Texas Workforce Commission raised hopes the
national and state unemployment rates may be leveling off
following the increases that characterized most of 2001.
Most local counties showed little labor market deterioration
following the September 1 terrorist attacks that sent
shock waves through the national and state economies.
The national unemployment rate rose by only 0.1 per-
cent during the first quarter, moving from 5.6 percent in
January to 5.7 percent in March. The 5.6 percent average
rate for this period is significantly higher than the 4.2 per-
cent average figure posted the same three months the pre-
vious year. The Texas jobless statistic also rose
Jan Mr May Jra Sep Nv 2 Jan o Mn
Sour: U.S. Burau of Labor Stocoand T Tm Wora omsCommsaIon
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Tarleton State University. Students in Free Enterprise. Cross Timbers Business Report, Volume 15, Number 3, Spring 2002, periodical, Spring 2002; Stephenville, Texas. (texashistory.unt.edu/ark:/67531/metapth298228/m1/1/: accessed July 27, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Tarleton State University.