Gross Domestic Product Growing at Faster Pace
Skidmore, Dave, THE JOURNAL RECORD
By Dave Skidmore
WASHINGTON _ The economy from January to March grew at the fastest pace since the early months of the Bush administration but the rebound remained lackluster by historical standards.
The gross domestic product, the broadest measure of economic health, grew at a 2.4 percent annual rate, adjusted for seasonal variations and inflation, the Commerce Department said Friday.
A month earlier it had estimated growth in the nation's output of goods and services at a somewhat smaller 2 percent rate.
In an accompanying report, the department said afterx corporate profits surged at an 8 percent annual rate in the first quarter, the biggest gain in four years. Also, bank officers told the Federal Reserve that loan demand is picking up from consumers and small and mediumzed businesses.
The favorable reports helped trigger a stock market rally, with the Dow Jones average of 30 industrials advancing into record territory beyond the 3,400 mark.
"The GDP report is good news, further demonstrating the return to a pattern of more solid economic growth since the start of the year," said Michael Boskin, President Bush's chief economic adviser.
Private economists agreed, but noted the rebound is still the mildest in half a century.
"This is a very positive set of signs that recovery is really here," said economist Allen Sinai of the Boston Co. "But by historical comparison it's about one third of a typical upturn. It's nowhere near the post World War II recovery."
President Bush is counting on economic gains to boost his chances of reection. Economists predicted the economy will have improved further by November, although not enough to appreciably reduce the unemployment rate from April's 7.2 percent, just a tenth of a percentage point below a 6-year high.
"There's a great deal of disenchantment out there and it won't go away immediately. . .but clearly the economy is moving in the right direction for incumbents," said economist Mark Zandi of Regional Financial Associates in West Chester, Pa.
Boskin joined other administration officials in pressuring the Federal Reserve to lower interest rates if needed to stimulate growth, saying, "Concerns remain about the slow pace of money growth and credit availability. …