Government to Release Revised Growth Report
The government is releasing a revised figure for fourth-quarter growth Thursday. The initial estimate was a very weak 0.6 percent. The new figure will finally determine if the U.S. economy is headed into recession.
RENEE MONTAGNE, host:
And it's a showdown today for people arguing whether or not the U.S. economy is heading into recession. This morning the government releases a new number for economic growth. Growth is already dancing around zero, so even a small change up or down could tip the scales.
NPR's Elaine Korry reports.
ELAINE KORRY: Right now fourth quarter expansion is pegged at a measly 0.6 percent. Pretty close to the R word. Economist Mark Englund with Action Economics in Boulder says the bears, who seem to be a majority these days, are expecting a revision downward.
Mr. MARK ENGLUND (Economist): For people that are claiming that we're going into a recession, if we can get a negative number for GDP in the fourth quarter, they're going to be pretty emboldened and I think we're going to see an I-told-you-so from them.
KORRY: On the other hand, says Englund, most economists who were surveyed predicted a slight revision upward.
Mr. ENGLUND: And if we end up with a positive number, an even stronger number than the .6 they reported, that really takes the wind out of the sails for the collapsion theory and we might be seeing perhaps a bounce later in the year.
KORRY: Either way, there's no doubt the economy is struggling. In a report to Congress, Federal Reserve Chairman Ben Bernanke said he stands ready to cut interest rates again to shore up the weak economy. He cited concerns over the subprime mortgage crisis and a softening labor market. The Fed has cut rates fives times since September and most economists are expecting another half percentage point reduction in mid-March.
Elaine Korry, NPR News. Transcript provided by NPR, Copyright National Public Radio.
