Six months after terrorists flattened New York's World Trade Center, the US economy is proving far more resilient than any concrete symbol of US financial might.
Wall Street has more than just recovered; it has raced above levels posted on the eve of the attacks, which closed the New York Stock Exchange for a week in a cloud of dust and rubble.
Manufacturers appear to have broken out of an 18-month slide. Shoppers shook off the shock in weeks and have kept on buying. Even the labor market is showing signs of recovery.
PHOTO: AFP
Analysts, once almost united in declaring the US economy had plunged into a contraction in the aftermath of the attacks, are now bickering over whether there was a recession at all.
"You just have to stand back and say, wow," said Banc One economist Diane Swonk. "What a magnificent economy we have. It is incredibly responsive, remarkably adaptable. What heroism was shown by the people who got financial markets back to work."
Wall Street's blue chip barometer, the Dow Jones industrials average, leapt to 10,572.49 Friday -- up 966.98 points or 10.07 percent since the eve of the September 11 attacks.
Airlines, which shed close to 100,000 jobs in the immediate aftermath, are slowly regaining altitude.
In January, traffic was down 13 percent compared to the first month of 2001, a significant improvement from the immediate aftermath of the terrorist attacks when traffic dropped 35 percent.
The jobless rate, which leapt to 5.8 percent in December, surprised all the experts by descending to 5.5 percent in February.
The National Bureau of Econo-mic Research, charged with dating US business cycles and heavily influenced by the impact of the terrorist attacks, declared that a US recession began in March last year.
But GDP shrank only in one quarter of 2001 -- the July-September period -- when it fell 1.3 percent. In the last quarter, it surprised all the experts by expanding 1.4 percent.
"It looks like the negative economic impact from the terrorist attacks was fairly transitory given the bounce back we are seeing," said Paul Ferley, economist at Bank of Montreal in Chicago.
"Households seem to responding very aggressively to some of the interest rates cuts," he said. "We have seen car sales very strong, housing has remained very strong, that has gone a long way in terms of making this negative impact from the terrorist attack shortlived."
The momentum behind the economy was strong, he said, forecasting average GDP growth of 3.5 percent over the next couple of quarters and more than 4 percent in the second half of this year.
"That is fairly strong, although not as rapid as the second half of the 1990s."
US Federal Reserve chairman Alan Greenspan capped the good news by declaring last week that an economic recovery, although likely to be muted, was already well under way.
Ironically, the good economic news hit last week just as US Senators ended months of delays and passed a US$42 billion, 10-year economic stimulus package.
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