Dow Jones Newswires
WASHINGTON -- Consumer sentiment, already weakening before Sept. 11, dropped further afterwards.
The University of Michigan confirmed that its full-month report on September consumer sentiment tumbled to 81.8 from August's 91.5 reading. Most of the drop, to 83.6, had shown up in the university's mid-September report tallied before the attacks.
The survey found a surge in confidence right after the attack, according to Richard Curtin, who directs the consumer survey, and then a steep plunge. The index rose 4.7 points during the week following the attack, then plunged 16.1 points the following week, after the stock market reopened.
Meantime, the government reported the economy grew a little bit more than previously estimated in the second quarter. Gross domestic product, a measure of all goods and services produced in the U.S., rose at a revised 0.3% pace, the Commerce Department said, up from the 0.2% rate previously reported. The change largely reflected a bigger drop in imports than earlier estimated.
Many economists predict the U.S. economy will slide into a recession during the last half of this year in the wake of the Sept. 11 attacks on the World Trade Center and the Pentagon. The second-quarter report, however, shows the economy is a bit better off than previously thought.
Relatively strong consumer spending has offset a plunge in spending by businesses. Business investment was unchanged in the second-quarter report, still down 14.6% after falling 0.2% in the first quarter. Businesses cut inventories by $38.3 billion in the second quarter -- the largest reduction since the first quarter of 1983 -- after cutting them by $27.1 billion in the first.
The report showed consumer spending rose at an unrevised 2.5% pace during the quarter, down from 3% in the first quarter.

--- GROSS DOMESTIC PRODUCT
Here are some of the major components of the gross domestic product expressed in seasonally adjusted annual rates in billions of chained (1996) dollars:

1Q'01 2Q'01(r)
GDP ....................... 9,334.5 9,341.7
less: inventory change .... 1.9 6.8
equals: final sales ....... 9,347.8 9,364.8

Components of Final Sales
Personal Consumption ...... 6,388.5 6,428.4
Nonresidential Invest. .... 1,373.9 1,320.9
Residential Invest. ....... 372.9 378.3
Net Exports ............... -404.5 -406.7
Gov't Purchases ........... 1,603.4 1,623.0
Implicit Price Deflator ... 3.3 2.1

(r)=revised