2000
In the year 2000 the economy grew at rates that economists thought could not be sustained. In the five years ending in the second quarter of 2000 the economy grew at a 4.4 percent annual rate. The economy had not grown that fast for any five-year period since 1983-88. Growth peaked at 6.1 percent in the four quarters ending Q2.2000. Usually, growth is highest near the beginning of a recovery, not deep into an expansion. After Q2 growth stalled, coming in at a 2.2 percent rate in Q3 and a 1.1 percent rate in Q4, the slowest two consecutive quarters since the first half of 1995. The slowdown was attributed to higher energy costs, and the tightening of monetary policy in 1999-2000-leading to less access to credit for relatively risky businesses. Even though the economy slowed in Q3 and Q4 the unemployment rate for the year was at a low of 4% going down from 4.5% in 1998, and 4.2% in 1999, then rising again to 4.8% in 2001. These labor market gains were widely shared as Hispanic and African-American unemployment rates both dropped to historic lows. Although the economy started to fall the purchase of new homes hit record high in Q4 and inflation was at a rate of 3.4%.