The catalyst for the strong growth in the first quarter was gross private domestic investment, which increased at an annualized rate of 22.6 percent - its first positive performance in seven quarters. Meanwhile, real consumer spending increased at a 3.5 percent rate, which was down somewhat from a strong 6.1 percent fourth quarter gain.

Restaurant and Bar Sales Continue to Outpace Sales in Other Retail Sectors
In spite of the downturn in the immediate aftermath of the September 11 attacks, growth in restaurant and bar sales continued to outpace other retail sectors, according to U.S. Census Bureau data. In the 12 months ending March 2002, restaurant and bar sales increased at a 4.3 percent rate - nearly double the 2.3 percent gain in sales at other retail establishments. This marked the fifth consecutive month - and 12th out of the last 14 months - in which restaurant and bar sales growth outpaced the other retail sectors on a 12-month basis.

On a year-to-date basis through March 2002, restaurant and bar sales increased at a 5.0 percent rate - well above the 2.7 percent increase in other retail sectors during the same period.

Menu Price Growth Slowed in March
For the first time in six months, growth in menu prices fell below the increase in overall consumer prices. Menu prices advanced at a seasonally-adjusted 0.1 percent rate in March, compared to a 0.3 percent gain in overall consumer prices. However, in the 12 months ending March 2002, menu prices increased at a 2.8 percent rate - nearly double the 1.5 percent gain in overall consumer prices.

Wholesale Food Price Growth Continues
Due in large part to rising energy prices, overall wholesale prices registered a sharp increase in March, according to the Bureau of Labor Statistics. Overall wholesale prices jumped a 0.9 percent in March (before seasonal adjustment), compared to a 0.7 percent increase in wholesale food prices. In spite of the March performance, growth in wholesale food prices continues to outpace overall wholesale prices. In the 12 months ending March 2002, wholesale food prices increased at a 1.7 percent rate, compared to a 1.4 percent decline in overall wholesale prices.

Number of Longer-term Unemployed Individuals Continues to Increase
Although the national economy registered its second consecutive quarter of growth in the first quarter, the employment situation remains less than impressive. The economy did add 58,000 jobs in March, but it came on the heels of seven consecutive monthly employment declines.

Consequently, the number of unemployed workers remains at a relatively high level. In March, 8.1 million people were unemployed, up from 7.9 million in February. Even more striking is the proportion of the unemployed that are having a difficult time finding work. Of the 8.1 million unemployed in March, 16.3 percent have been unemployed for 27 weeks or longer - the highest level since 1996. In the 1990-91 recession, this longer-duration unemployed proportion peaked at 23.1 percent in October 1992 - 19 months after the official end of the recession.