Growth weak, but recession unlikely
Latest economic data offer modest hope
WASHINGTON – The economy grew slightly more than previously estimated in the last quarter and weekly jobless claims fell to their lowest number in five months, signs that the nation may not be heading into another recession yet.
The economy grew at an annual rate of 1.3 percent from April through June, an anemic but marginally better pace than the most recent estimate of 1 percent, federal officials said Thursday.
The revised data on total economic output, also known as gross domestic product, narrowly beat expectations.
Also Thursday, the Labor Department reported that weekly claims for unemployment insurance dropped 37,000 last week to 391,000, the lowest figure since early April.
Economists said claims below 400,000 were a positive sign for job growth. The unemployment rate was 9.1 percent in August after the economy failed to add any new jobs.
Even so, a private report Thursday indicated that only about a third of the nation’s chief executives expected to hire employees any time soon.
The two government reports indicate fears of another recession are unwarranted right now, said Chris Rupkey, chief financial economist for the Bank of Tokyo-Mitsubishi in New York.
“The economy is not teetering on the edge of a cliff, getting ready to fall over into a recession,” he said.
Technically, a recession is determined by two straight quarters of negative growth.
In the first three months this year, the economy barely grew, expanding at an annual rate of just 0.4 percent, leading to fears of double-dip recession as the economy struggled to recover from the deep downturn that technically ended in June 2009.
The Commerce Department originally had estimated second-quarter economic growth at 1.3 percent in July, but revised the figure down to 1 percent last month.