Full text of U.S. Financial Data : February 1, 2001

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February 1, 2001

USFinancialData
THE WEEK’S HIGHLIGHTS:
■ At its Jan. 31 meeting, the Federal Open Market Committee (FOMC)
voted to lower its target for the federal funds rate by 50 basis
points to 5.5 percent. After the meeting, the FOMC issued the
following statement:
Consumer and business confidence has eroded further,
exacerbated by rising energy costs that continue to drain
consumer purchasing power and press on business profit
margins. Partly as a consequence, retail sales and business
spending on capital equipment have weakened appreciably.
In response, manufacturing production has been cut back
sharply, with new technologies appearing to have accelerated
the response of production and demand to potential excesses in
the stock of inventories and capital equipment. Taken together,
and with inflation contained, these circumstances have called
for a rapid and forceful response of monetary policy. The
longer-term advances in technology and accompanying gains
in productivity, however, exhibit few signs of abating and these
gains, along with the lower interest rates, should support
growth of the economy over time. Nonetheless, the Committee
continues to believe that . . . the risks are weighted mainly
toward conditions that may generate economic weakness in
the foreseeable future.
■ According to the advance report, real GDP rose at a 1.4 percent
annual rate during the fourth quarter. Following a 5 percent
increase in 1999 (Q4/Q4), real GDP increased 3.5 percent in
2000, the smallest gain in five years.
All data are seasonally adjusted unless otherwise indicated.
U.S. Financial Data is published weekly by the Research Division of the Federal Reserve Bank of
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