Share this article

print logo

ECONOMY WAS 'DANGEROUSLY CLOSE' <br> TO RECESSION PRIOR TO ATTACKS

The U.S. economy managed to eke out a tiny 0.3 percent growth rate in the April-June quarter, dangerously close to a recession even before the Sept. 11 terrorist attacks.

Many economists believe those attacks and the toll they have taken on consumer confidence will spell the end of the nation's longest economic expansion and push the country into its first recession since 1990-91.

The Commerce Department reported today that the gross domestic product -- the nation's total output of goods and services -- was growing at a barely discernible rate of 0.3 percent in the spring, the weakest performance in more than eight years.

GDP growth had been a weak 1.3 percent in the first quarter and it has been hovering in that range since the summer of 2000, when the economy suffered an abrupt slowdown that has already cost more than 1 million manufacturing jobs.

The new second quarter figure was slightly higher than a 0.2 percent estimate of second quarter growth made a month ago, an improvement the government said came from a slightly better trade performance.

Inflation, as measured by a price gauge tied to the GDP, rose at an annual rate of just 1.3 percent in the second quarter, the smallest increase since early 1999. This GDP price measure was up 3.2 percent in the first quarter.

UAL suspends dividend

CHICAGO (AP) -- As part of a series of moves intended to save money in the wake of the Sept. 11 terrorist attacks, the parent of United Airlines has indefinitely suspended its quarterly dividend.

UAL Corp. also said Thursday that chief financial officer Douglas Hacker was stepping down and would be replaced by Frederic "Jake" Brace. The board said Hacker will now focus on development of the company's NewVentures unit, of which he is already president.

Suspension of the dividend on UAL's common stock will save about $2.5 million, the company said.

Mortgage rates at 3-year low

WASHINGTON (AP) -- Mortgage rates around the country this week dropped to their lowest levels in nearly three years.

The average interest rate on 30-year fixed-rate mortgages fell to 6.72 percent, down from 6.80 percent last week, according to the nationwide survey released Thursday by Freddie Mac, the mortgage company.

It marked the seventh week in a row that 30-year mortgages have been under 7 percent. This week's rate marked the lowest level for 30-year mortgages since they averaged 6.69 percent the week of Dec. 18, 1998.

Fifteen-year mortgages, a popular option for refinancing, dipped to 6.23 percent, compared with 6.30 percent the previous week, and is the lowest level since Oct. 9, 1998.

On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 5.45 percent, down from 5.58 percent the previous week. This week's rate was the lowest since Oct. 30, 1998, when the rates on one-year ARMs averaged 5.42 percent.

There are no comments - be the first to comment