Economy growing at fastest pace in 15 years as 1999 ended

Economy growing at fastest pace in 15 years as 1999 ended
ASSOCIATED PRESS

WASHINGTON, MARCH 31: The supercharged United States economy soared to an annual growth rate of 7.3 per cent in the final three months of 1999, the strongest performance in 15 years, the Government said Friday.

The increase in the Gross Domestic Product (GDP) marked a better-than-expected upward revision from an estimate a month ago that GDP was expanding at 6.9 per cent rate in the fourth quarter.

The higher final estimate reflected new data showing that US exports were stronger than previously believed and business construction was increasing at a faster pace than earlier estimated.

The Commerce Department's last look at GDP performance in 1999 underscored just how much momentum the economy had going into 2000. The Federal Reserve, fearing unchecked growth could worsen inflation, has already raised interest rates twice this year, in February and last week, following three rate increases in 1999.

Many economists are predicting at least two more rate boosts before mid-year as the Fed continues trying to cool an economy it believes is growing faster than the country's ability to supply workers and products for a seemingly insatiable consumer.

The rate increases are designed to raise borrowing costs for big-ticket items such as homes and cars and in that way cool off demand and keep inflation from getting out of hand.

Critics, however, have charged that the Fed is fighting a phantom menace with no signs, outside of energy, of any price pressure despite the rapid growth.