The Economy is Still Expanding

Chart of the Week for August 10-16, 2001

Second quarter Gross Domestic Product (GDP) rose at an anemic 0.7% annual rate. It was the slowest growth rate since 1993. Consumer spending, which accounts for approximately two-thirds of GDP, increased at a slower rate than in the first quarter. However capital spending experienced its sharpest drop in nearly twenty years. Nevertheless, solid consumer confidence and a strong housing market may continue to bolster the economy, and together with tax rebate checks and possible future interest rate cuts lead to higher growth in the future.

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