On Wall Street, the market recovered from moderate losses earlier in the session, and analysts attributed its resilience to optimism that the Federal Reserve will lower interest rates for a fourth time this year when it meets May 15. The Dow industrial average was up 49.64 at 10,063.11, down 13.6 percent from its all-time high. A slide in the stock market, rising unemployment and worries about the economy are all factors that make people feel less inclined to spend, economists said. Most economists believe, however, that the economy still managed to grow during the first three months of 2001, but not by much. Given that the economy was booming in the first half of last year, the swiftness of the slowdown has jolted many Americans.
People see a bear market, layoff announcements, earnings warnings.
Government officials said layoffs in the automobile industry, because of production cuts in the face of slumping demand, accounted for part of the unexpected rise in jobless claims. With employers' appetite for workers waning, economists expect the nation's unemployment rate, now at 4.3 percent, to rise to 4.5 percent or possibly higher in the coming months. In another report, the Labor Department said its Producer Price Index, which measures inflation pressures before they reach store shelves, edged down by 0.1 percent last month. Lower prices for energy and computers outweighed higher prices for food. It provided a brighter reading on wholesale inflation than many analysts expected and marked the first drop in the PPI since August.