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GDP Rises Two-Tenths of a Percent in Second Quarter

Aired August 29, 2001 - 08:31   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Just in from the government, an economic number with the power to move the markets: the revised gross domestic product for April, May and June.

We go now to New York and Chris Huntington of CNN Financial News.

And, Chris, I'm told -- say it once again in my ear -- it's up 0.2 percent. We were not expecting that, were we?

CHRIS HUNTINGTON, CNN CORRESPONDENT: That's a little bit better than expected.

The broad expectation had been that this number for the second quarter, GDP, gross domestic product growth would show flat to almost negative growth. The fact that it is coming in still positive is a plus. It's a psychological plus. After all, this is history we're looking at. This is what happened in the second quarter a few months ago.

But the fact that it is still in positive territory is a psychological plus.

PHILLIPS: So, Chris, this means no recession, correct?

(LAUGHTER)

HUNTINGTON: I can't -- I'm not going to go there for you, Kyra. But at least this tells us that we're still keeping -- the economy is keeping its head above water.

There was, as expected, some trailing off in consumer spending compared to the preliminary reading that we had -- the advanced reading, I should say -- that we had back in July. And there was a narrowing of the trade deficit, which accounts for some of this. And, in fact, inventories were rationing down a bit, which takes the number lower. But that's a silver lining because it means that industry can ramp up production in the months ahead.

PHILLIPS: That's right. I know analysts were concerned. They wanted to get those shelves cleared right out.

So, before we let you go, how is this going to affect the markets? HUNTINGTON: Oh, that's anybody's call. But psychology, of course, is king in the marketplace. And this is probably a positive going into today.

PHILLIPS: Very good news.

Chris Huntington of CNN Financial News, thanks so much.

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