RECOVERY GETS A SWIFT YULE KICK

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, January 29, 1993                   TAG: 9301290259
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium
RECOVERY GETS A SWIFT YULE KICK
A burst of Christmastime spending propelled the nation's economy to its fastest growth in four years, the government said Thursday. But analysts warned the revival will sag without more jobs.
The gross domestic product - the sum of goods and services produced in the United States - grew at a healthy 3.8 percent annual rate during October-December, the Commerce Department said. That exceeded the 3.4 percent rate of July-September and the 3 percent rate most economists had predicted.
During the fourth quarter, a 4.3 percent advance in consumer spending accounted for about two-thirds of the growth. Other bright spots included a 9.7 percent increase in spending by businesses for new equipment and buildings and a 29.1 percent leap in housing construction, the best since the end of the last recession nine years ago.
Most economists expect growth in the current quarter to lapse to 3 percent or lower. They warned that consumers raided savings and used credit cards to finance their holiday spending spree and consumer spending will decline sharply when the bills come in unless employers step up their hiring pace.
Analysts cite two other reasons for concern. A year ago, President Bush ordered tax withholding reduced to put more cash in Americans' pockets. That will result in higher tax bills or reduced refunds for many people this year. Also, the economies of Japan and Europe have slipped, depressing U.S. export sales.
For all of 1992, GDP totaled an inflation-adjusted $4.92 trillion, up 2.1 percent from the previous year. Although a moderate gain at best, that was the best since the first year of Bush's presidency, 1989, when the GDP rose 2.5 percent
Carol S. Carson, director of the Commerce Department's Bureau of Economic Analysis, said economic output has increased 3.8 percent during the seven quarters since the recession ended in March 1991. But that's less than half the average 7.9 percent gain experienced during the same period following the five previous economic recoveries.

by Bhavesh Jinadra by CNB