GDP's Expected Drop Seen as Improvement

The government on Friday will make its first estimate of the gross domestic product - the value of all goods and services produced in the United States - for the second quarter of this year.

Many analysts predict the economy shrank at an annual rate of 1.5 percent from April through June, an improvement from the first quarter.

President Barack Obama told reporters Thursday that while he expects the report to show the economy contracted last quarter, the United States has "stepped away from the precipice."

Mr. Obama cited reasons to remain upbeat. Job losses have slowed from the pace of January and February, after he took office. And he says housing prices are rising for the first time in three years.

The number of newly laid-off workers filing first-time claims for jobless benefits rose last week, the Labor Department said Thursday, but the increase was mostly due to seasonal distortions.

The Labor Department data, while encouraging, doesn't dispel the broad weakness in the job market. Weekly jobless claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007.

And the total number of jobless benefit recipients is much higher when federal emergency programs are included. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.

Including those extended programs, a record high of 9.27 million people received unemployment benefits in the week that ended July 11, according to the most recent data available.

The recession, which began in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs. The unemployment rate is expected to rise to 9.7 percent when the July figure is reported next week.
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