The U.S. economy failed to grow for the first time since March 1991, according to the National Association of Purchasing Management (NAPM), whose manufacturing index fell to 41.2 in January.
A level below 42.7 generally indicates a contraction in the
economy, said NAPM Chairman Norbert J. Ore. The data released Thursday
"corresponds to a -0.6 percent annual decrease in real gross
domestic product," Ore said.
The NAPM report is one of the year's first indications of economic activity in the important
manufacturing industry. The figures are based on a survey of
purchasing executives, who buy the raw materials and supply for
manufacturing at more than 350 industrial firms.
Although the Tempe, Ariz.-based NAPM likened the January numbers
to those of the 1991 recession, it allowed some room for optimism.
"This technology-driven, global economy is more resilient and
should be able to rebound more quickly than it did in 1991," Ore said.
Many economists believe growth this year will slow to around 2.5
percent, but Federal Reserve Chairman Alan Greenspan said last week
that activity in the current quarter is probably "very close to
In an attempt to boost growth in the economy, the Fed on
Wednesday slashed interest rates by a half-percentage point the
second time in a month officials have made such a move.
In reducing a key interest rate, the Fed maintained its stance that its chief
concern is the threat of the economy's stalling and falling into a
"The risks are weighted mainly toward conditions that may
generate economic weakness in the foreseeable future," the Fed
The Associated Press contributed to this report