Friday, November 23, 2007

How Bad Was 2001 US Economy?

Letter-to-the-Editor published in Laguna Beach Independent November 23, 2007 Fuzzy Memories

I was telling a liberal friend of mine how serious the World Trade Towers terrorist attack was to the shaky U.S. economy and what a remarkable comeback we have made. My liberal friend seemed to think it was no big deal.

Since memories are sometimes fuzzy, I would direct your readers to

“Well before September 11, 2001 the U.S. economy was showing clear signs of weakness. Industrial production peaked in September 2000 and fell every month between then and August 2001. Employment peaked in March 2001, and 495,000 jobs were lost prior to the attacks. In addition, U.S. stock markets had already taken a beating. By September 10, the Standard & Poor’s (S&P) 500 Index was down 28.5 percent from its peak and the NASDAQ Composite Index was down 66.4 percent.

In September 2001, retail sales fell by $6 billion (2.1 percent); durable goods new orders fell $11.6 billion (6.8 percent); and new claims for unemployment insurance surged by 50,000, the biggest monthly jump since August 1982. Industrial production fell 1.0 percent in September.

When stocks finally opened for trading on September 17, the S&P 500 fell another 7.0 percent while the NASDAQ fell 9.9 percent, before bottoming on September 21. Major airlines immediately cut scheduled flights by 30 percent, and even with fewer flights, planes were not full. Hotels experienced a surge in vacancies and the economy shed 1.1 million jobs in the final four months of 2001.”


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