PROUD MARY

Economy improves in second quarter, raising hopes for second-half rebound (Jeannine Aversa, 8/28/03, Associated Press)

Idling for months, the economy finally shifted into a higher gear in the second quarter as consumers and businesses bought more and the federal government ramped up military spending on the Iraq war. The improvement reinforced the belief that the economy will pick up speed through the rest of the year.

The broadest measure of the economy's performance, gross domestic product, grew at an annual rate of 3.1 percent in the April to June quarter, according to revised figures released Thursday by the Commerce Department.

That was faster than the 2.4 percent growth rate first estimated a month ago and came after two straight quarters of lackluster economic growth. GDP, which measures the value of all goods and services produced within the United States, increased at just a 1.4 percent pace in the final quarter of 2002 and the first three months of this year.

''The economy is rolling forward now with considerable momentum and there's no reason to think we won't have strong economic growth through the rest of the year,'' said Bill Cheney, chief economist at John Hancock.

Posted by Orrin Judd at August 28, 2003 6:32 PM