Financial market participants were on pins and needles waiting for Greenspan's semi-annual testimony on monetary policy and the economic outlook. He didn't say anything new. He reaffirmed the Fed view that the economy is likely to improve in the second half of the year. He indicated that the Fed stood ready to reduce the federal funds rate even further should the need arise. Deflation really isn't a problem in the U.S., only a "remote possibility". Budget deficits are bad in the long run because they raise the general level of interest rates and dampen private borrowing demand. Bond and stock prices both fell after Greenspan's remarks.
Economic news was somewhat more upbeat. Housing starts jumped in June. Two Fed manufacturing surveys both showed positive signs for July and even industrial production rose in June. Retail sales improved in June. Prices remained stable as measured by the CPI.
The Business Dating Cycle Committee of the NBER (National Bureau of Economic Research) declared the recession ended in November 2001, eight months after it began. It normally takes the NBER more than a year to determine official business cycle peaks and troughs because they don't want to be premature in their assessment. This time, they wanted to be sure that the 2001 recession truly ended - and that any new downturn would be considered a separate recession, rather than a continuation of the old one.