Revised GDP Seen Outpacing 1st Report

The U.S. economy was probably stronger than previously reported in the last three months of 1999, and figures to be released Friday could even show the economy grew at a 7% rate for the period, analysts said. Gross domestic product, the nation’s total output of goods and services, probably grew at a revised 6.2% at an annual rate in the fourth quarter. That’s up from the government’s initial estimate of a 5.8% advance, also at a yearly pace. The revision also points to a strong first half of the new year, analysts said. The Commerce Department publishes three GDP estimates for each quarter as analysts gather more information. Friday’s is the first; the final revision will be published March 30.

Federal Reserve Chairman Alan Greenspan could use a stronger-than-expected GDP report to bolster the message about the need for higher interest rates again when he testifies before the Senate Banking Committee on Wednesday in the second part of his report. Thursday, he suggested the higher interest rates are likely to temper the booming economy.

Other economic reports due this week:

* Factory orders for durable goods, big-ticket goods ranging from autos to steel girders, declined 1.9% in January after rising 5.5% during December, analysts predict the Commerce Department’s report Thursday will show.

* First-time claims for state unemployment benefits declined by 3,000 in the week ended Feb. 19 to a seasonally adjusted 280,000--a level consistent with the lowest unemployment since 1970, analysts said. The Labor Department report will also be issued Thursday.

* The National Assn. of Realtors is likely to report Friday that sales of previously owned homes, which set an annual record in 1999, slipped in January, falling 0.8% to a seasonally adjusted annual rate of 5.02 million from 5.06 million in December.