BOOM KEEPS ON GOING; SOARING U.S. ECONOMY SHOWS NO SIGNS OF SLOWDOWN, EXPERTS SAY.Byline: Sylvia Nasar Sylvia Nasar (born 1947 in Rosenheim, Germany, she is the John S. and James L. Knight Professor of Business Journalism at Columbia University, and best known as the author of A Beautiful Mind. Early life and historyNasar was born to a German mother and Uzbek father. The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times America's economic boom - already the second-longest on record - shows no signs of flagging. Despite a decline in auto production and another sharp deterioration in the nation's trade balance, the U.S. economy grew at a surprisingly robust 4.5 percent annual rate during the first quarter of 1999, the government reported Friday. That is the sort of heady pace usually associated with the first, not the ninth, year of an economic expansion. Moreover, most forecasters, including those at the Federal Reserve, had been expecting a visible slowdown from the previous quarter's frenetic 6 percent rate. ``This economy continues to defy the aging process,'' said Bill Cheney, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at John Hancock Mutual Life Insurance Co. in Boston. ``The only discernible weakness is the trade deficit. And this has merely slowed the economy from warp speed warp speed n. Informal An extremely rapid speed or state of activity: "A young pronghorn antelope teased a yearling wolf, shifting into warp speed and leaving the wolf in the dust when it tried to pursue" .'' To William Dudley William Dudley was Dean of Windsor and then Bishop of Durham. He was nominated to Durham probably on September 1, 1476. He was consecrated between September 1 and October 12 1476. He died November 24, 1483.[1] Notes 1. , chief economist at Goldman, Sachs & Co., the latest report on America's gross domestic product ``in some ways was even stronger than the fourth quarter's.'' It was too strong for some. Investors in the financial markets, who had been basking in an earlier report showing that wage pressures had eased, were stunned by the economy's momentum. Fears that the Fed might raise interest rates to cool things off sent bond prices down sharply. The stock market headed south as well. The Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. dropped 89.34 points to close at 10,789.04. A burst of domestic spending fueled last quarter's gains. Consumers, who account for more than two-thirds of the nation's buying, spent at the fastest pace in more than a decade. Home purchases shot up at an annual rate above 15 percent. And business investment in new plants and equipment, which had faltered last summer, continued to rebound, advancing at a 7.6 percent rate. Even state and local governments, flush with cash these days, helped fuel the boom by plowing their surpluses into road repairs and highway construction. All figures in the Commerce Department report are adjusted to account for inflation and predictable seasonal variations. Despite the virtual absence of inflation now, Dudley said, growth this fast always increases the risk that wages and prices will start to creep steadily upward. But even though the so-called GDP deflator GDP deflator A price index used to adjust gross domestic product for changes in prices of goods and services included in the GDP. The GDP deflator is a more broadly based and, many economists argue, a better measure of inflation than the consumer price index - which measures changes in the prices of domestically produced goods - jumped to a 1.4 percent annual rate compared with eight-tenths of a percent in the fourth quarter, the increase appeared mostly to reflect a one-time pay increase for civil servants. Steven Landefeld, director of the Bureau of Economic Analysis, pointed out that prices on everything that businesses and consumers actually buy, including cut-price imports, rose no faster last quarter than in the fall, at a 1.1 percent rate. CAPTION(S): Chart CHART: RISE IN THE GROSS DOMESTIC PRODUCT The GDP GDP (guanosine diphosphate): see guanine. measures all the goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. produced by workers and capital located in the United States, regardless of ownership. Source: Department of Commerce Associated Press |
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