Report fuels hopes of recovery
8:57 PM 2/27/04
Jeannine Aversa Associated Press Writer

WASHINGTON - Brisk business spending helped the economy expand at a healthy 4.1 percent pace at the end of 2003, raising hopes that the recovery will be durable and spur more meaningful job growth in the coming months. <

The Commerce Department's latest reading on gross domestic product showed the economy grew slightly faster in the October-to-December quarter than the 4 percent annual rate estimated a month ago. <

GDP measures the value of all goods and services produced within the United States and is an important gauge of the economy's fitness. <

Although the fourth-quarter pace was slower than the breakneck 8.2 percent growth rate registered in the third quarter, the economy's performance in the second half of last year represented the fastest back-to-back quarterly increases since the first two quarters of 1984. <

"The economy is on track to having a good year," said Mark Zandi, chief economist at Economy.com. "If history is any guide, we should see better job growth in the spring and summer." <

Looking ahead, economic growth in the current January-to-March quarter is expected to clock in at a rate of around 4.5 percent or higher, according to some analysts' projections. Growth in the April-to-June quarter also should be in that range, some economists believe. <

Tax refunds, which the government will start mailing out this spring, along with tax incentives for businesses and decades-low short-term borrowing costs, should provide juice to the economy in the first half of this year, economists said. <

Even though the economy is in recovery mode, job growth has been painfully slow. <

The economy has lost 2.2 million jobs since President Bush took office in January 2001, a sore spot as he seeks re-election. Democratic presidential contenders have seized on this to make the argument that his economic policies are not working. <

Federal Reserve Chairman Alan Greenspan and other economists, however, are hopeful that companies will step up hiring. <

"The last worry spot in the economy is the jobs situation," said Rick Egelton, economist at BMO Financial Group. "But I think we'll see a rebound this spring. U.S. companies have restructured to get their financial houses in order. Their balance sheets look much better. They are starting to invest." <

The University of Michigan reported Friday that its consumer sentiment index slid to 94.4 from 103.8 in January. An AP-Ipsos consumer confidence index, released earlier this month, and a Conference Board measure released earlier this week also showed consumers felt less confident in the economy in February. <