Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (39388)	7/25/2001 7:04:24 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

The Big Question: When Will the Economy Rebound? siliconinvestor.com Best Regards, Scott

To: Jim Willie CB who wrote (39388)	7/25/2001 8:29:19 PM
From: Ex-INTCfan	Respond to of 65232

deleted

To: Jim Willie CB who wrote (39388)	7/27/2001 10:46:45 AM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Economy: Weakest Performance in 8 Years Friday July 27, 9:57 am Eastern Time By Caren Bohan WASHINGTON (Reuters) - The U.S. economy turned in its weakest performance in eight years during the second quarter as businesses slashed spending on software and other investments and pared back bloated inventories, the government said on Friday. The Commerce Department said gross domestic product, the broadest measure of the nation's economic health, increased at an inflation-adjusted annual rate of 0.7 percent in the April to June quarter. That followed a 1.3 percent gain in the first quarter, which was revised up slightly from a previously reported 1.2 percent increase. The second-quarter GDP figure marked the economy's most lackluster showing since a 0.1 percent contraction in GDP in the first quarter of 1993. Bond prices gained on the report, which was slightly weaker than the 0.9 percent GDP rise economists had expected and which helped cement expectations the Federal Reserve would cut interest rates by another quarter-percentage point in August. ``The numbers were on the soft side, but came in about as expected,'' said Astrid Adolfson, economist at MCM Moneywatch in New York. ``For the bond market, it's a plus. For the Fed, it means a green light to ease 25 basis points in August.'' HOLDING ABOVE ZERO Even though growth in the recently ended quarter was anemic, the fact that GDP rose at all was in some ways good news. In recent months, some economists had feared the economy might have slipped into its first recession in 10 years. A recession is loosely defined as two straight quarters of falling GDP, so any decline in economic output would have been an ominous sign. ``Clearly, the good news is a plus number,'' said Wayne Ayers, chief economist at FleetBoston Financial. ``We've avoided a recession and we'll continue to avoid it.'' Ayers added, ``The biggest risk is the consumer. Everything is still good there. Layoffs have been concentrated in the manufacturing sector but they have been spreading.'' U.S. consumers, whose spending makes up two-thirds of GDP, have so far been the economic stalwarts. Their expenditures increased at a 2.1 percent rate in the second quarter following a 3 percent gain in the first quarter. An improved trade deficit helped to push the economy along as well. But the business sector has hit hard times. Since the beginning of the year, companies have been reducing inventories to bring supplies of unsold cars, computers and other goods back into line with demand. That process continued in the second quarter, with inventories falling $26.9 billion after a $27.1 billion decline in the first quarter. However, inventories contributed positively, if only very slightly, to growth, since the latest inventory drop was smaller than the first-quarter decline. But business fixed-investment plummeted 13.6 percent in the April to June period, the biggest drop in 19 years. It had fallen 0.2 percent in the first three months of the year. The latest decline was led by a 14.5 percent drop in spending on equipment and software. Strength in home building, though, helped to offset some of the weakness. Investment in new residences climbed 7.4 percent. MILD INFLATION Another silver lining in the report was tame inflation. The price index for personal consumption expenditures rose by a mild 1.7 percent, the smallest gain since the first quarter of 1999. The index, closely watched by the Federal Reserve, increased 3.2 percent in the first quarter of this year. The latest GDP release included some methodology changes, including a key change to the way telecommunications equipment is treated, and updated data from recent business surveys. The changes, which revised the GDP series back through 1998, showed the economy slowed more sharply in the second half of last year than previously thought. GDP grew at a 1.3 percent annual rate in third quarter of last year, revised down from the previously reported 2.2 percent gain. Fourth-quarter growth was revised upward, however, to a 1.9 percent rise from 1.0 percent.

To: Jim Willie CB who wrote (39388)	7/27/2001 10:49:55 AM
From: stockman_scott	Respond to of 65232

New Home Sales Rose in June Friday July 27, 10:45 am Eastern Time By Mark Felsenthal WASHINGTON (Reuters) - Sales of new U.S. single-family homes rose in June, the government said on Friday, as the housing sector continued to display resilience in a slumping economy. New home sales climbed to a seasonally adjusted annual rate of 922,000 in the past month, a 1.7 percent increase from the revised May rate of 907,000. The June sales rate beat analysts' expectations of 921,000. The sale of new homes in June was 16.3 percent higher than a year ago. This was the biggest year-on-year increase in new home sales since December 1998-97. The new home sales level was above 900,000 for the seventh month in a row, the first time this has happened since the Commerce Department began keeping the statistics in 1963. New home sales climbed in the Northeast by 7.3 percent and in the South by 7.1 percent. June sales in the South set a record rate of 466,000 units. The sale of new homes dropped 9.3 percent in the Midwest and fell 1.6 percent in the West. May home sale were revised downward to 907,000 units from the originally reported total of 928,000. The rate of increase was revised to 0.2 percent from an originally reported 0.8 percent. Commerce reported a 3.9 month supply of new homes for sale at the June sales pace, the seventh month in a row the supply has been below 4 months, also a first in the keeping of this series of data. Analysts say the housing sector has remained strong on low mortgage interest rates and continued consumer confidence in spite of a gloomy economy. The 30-year fixed rate mortgage stood at 7.03 percent in the week ending Friday, mortgage finance giant Freddie Mac reported. Mortgage rates have remained close to 7 percent since the beginning of the year. Commerce reported Friday that the economy grew by 0.7 percent in the second quarter of the year, which many observers believe will be the low point of the economic slowdown. Recent housing data has been testimony to the strength of the sector. Existing home sales slipped slightly in June, but were above analysts' expectations and were still the fifth highest rate on record, according to the National Association of Realtors. The median sales price for an existing single-family home hit a record level. Housing starts also rose in June. Commerce reported on Thursday that the homeownership rate had tied a record level in the second quarter of the year at 67.7 percent, and that minority homeownership had reached a new high. Federal Reserve Board Chairman Alan Greenspan said on Wednesday the housing sector has been a very important contributor to the U.S. economy, as rising home values have offset declines in stock markets.