The U.S. economy crept ahead at its softest pace in eight years during the spring quarter, barely avoiding a negative performance that could have fanned recession fears. Consumers kept their wallets open while companies aggressively sold down inventories and slashed investment spending, leaving analysts split over whether a year-long downturn has run its course or was likely to worsen. The second-quarter GDP figure was down from a previously reported 0.7 percent rate of growth and trailed the first quarter's 1.3 percent, but it beat Wall Street economists' fears that growth had stalled out entirely. Now Pay raises are higher this year despite the slowing economy, but don't expect that to last.
Raises usually go out in the earlier part of the year.
The gloomy economic outlook already is prompting more employers to cut costs. Most workers should prepare for smaller or delayed raises next year. Regions Economy Showing Improvement, Survey Indicates May's Mid-America Business Conditions Survey shows promise that a regional economic slowdown is moderating. Creighton University economics professor Ernie Goss, in releasing his monthly survey's results Friday, said that May marked the second consecutive month for improvement in the overall index for the nine-state Midwestern region. Goss said that national and regional surveys indicate that the economic downturn is bottoming out and interest rate cuts already in the pipeline will thwart a potential recession for 2001.