After nine years of robust growth, America's economic bubble burst in 2000. Technology shares plunged in the spring, foretelling a sharp economic slowdown later that year. The Fed, led by Alan Greenspan, slashed interest rates. But the economy failed to pick up and was in recession before the devastating terrorist attacks of September 11th 2001. Its health took another knock in December when Enron's collapse shook investor confidence.
Yet once again America's economy defied the pessimists. On the back of strong productivity growth, resilient consumer spending and an upswing in corporate profits, it surged in the first three months of 2002. George Bush's $42 billion economic-stimulus bill seemingly came too late.
But by the summer the recovery was sputtering. A rash of corporate scandals undermined already weak investor confidence and sent equity markets into turmoil in July 2002. George Bush's projected $5.6 trillion budget surplus over ten years had almost disappeared and the country seemed set for a "double-dip" recession or the onset of deflation. To reinvigorate the creaking economy, George Bush reshuffled his economic-policy team and signed into law a second big tax cut in May 2003. November brought a slew of extraordinarily rosy economic news, some of it indicating that America's economic recovery will prove sustainable as the tax cuts' effects fade. A weak dollar is helping to boost exports, profits and jobs.
Rocky road to US recovery.
the US economy has had a rocky ride since President Bush took office in 2001 - but it may be coming right just in time for his re-election campaign. .
The US economy is the largest in the world, with a gross domestic product of over $10 trillion - one quarter of the world's total. But it has suffered from uneven growth in the past few years. .
After an unprecedented period of expansion during the 1990s, the economy ground to halt just as the 2000 election was taking place.