WASHINGTON (AP) _ Government figures released Wednesday showed
the economy virtually stood still in the fourth quarter, leading
public and private economists to predict that any meaningful
recovery is months away.
The Commerce Department said Wednesday the minuscule growth _
at an annual rate of 0.3 percent _ in the gross domestic product
was due mainly to a spurt in exports and a modest revival in the
housing sector. And some experts contend those gains will prove
Most other components of the GDP showed little or no strength,
including consumer spending, which accounts for two-thirds of the
nation's economic activity and is essential for any sustained
For the year, the GDP sank 0.7 percent, the first annual
decline since percent drop in 1982, the final year of the previous
recession. The GDP is the nation's total domestic output of goods
"Basically, it says the economy is stalled," said Sung Won
Sohn, an economist with Norwest Corp. in Minneapolis. "The economy
was treading water at the end of the year," concurred Mark Zandi of
Regional Financial Associates in West Chester, Pa.
Acting Commerce Secretary Rockwell Schnabel called the
sluggishness "clear and convincing evidence" of the need for quick
congressional enactment of the economic growth package President
Bush outlined Tuesday night in his State of the Union message.
Still, Federal Reserve Chairman Alan Greenspan told Congress on
Wednesday the central bank is beginning to see "some very subtle
signs that the erosion in the economy is beginning to stabilize."
He also suggested "this economy can move out of this extreme
lethargy with monetary policy alone" and without the huge tax cuts
that Bush and many congressmen are proposing.
Even with the growth package and the impact of lower interest
rates, a sustained recovery will not begin before spring, cautioned
Commerce chief economist Antonio Villamil at a news conference.
Zandi agreed, saying, "We should begin to see more signs of
growth by summer and maybe as late as fall in response to the
significant drop in interest rates and perhaps as a result of any
But any growth this year is likely to be sub par, compared to
other post-World War II recoveries, many economists agree.
Sohn, for instance, projects the GDP will grow about 2 percent
this year, just a third of the 6 percent average growth during the
first year of recent recoveries. …