Thursday, March 14, 2002

Signs point to end of economic downturn, Greenspan says March 13, 2002 6:11 p.m. EST "Federal Reserve Chairman Alan Greenspan found new reasons to be optimistic about the economy . . . he believed there has been more 'encouraging signs' of strength in recent days. . . . the rebound was likely to be modest, at least in the early going, because there is little pent-up consumer demand, given that Americans spent strongly last year on autos and new homes." "Greenspan noted the favorable unemployment report that came out on Friday, showing that businesses added 66,000 workers to their payrolls, the first increase in seven months. 'In recent days, encouraging signs of strengthening underlying trends in final demand have emerged, although the dimensions of the pickup remain uncertain' He also said he believes that one of the key weaknesses that triggered the recession, a drop in business investment - especially in high-tech areas, would soon turn around. 'If the recent more favorable economic developments gather momentum, uncertainties will diminish, risk premiums will fall and the pace of capital investment embodying new technologies will increase' . . ." ... [more] 9:03:45 AM  Google It!  comment  []

Treasury official optimistic on U.S. economy 11:25 AM ET March 14, 2002 "A return to healthier U.S. economic growth will hold in check any reemergence of the federal budget deficit, Treasury Undersecretary for Domestic Finance Peter Fisher said Thursday.  His optimism grows out of recent economic figures that show at least a modest improvement for the economy so far in 2002. In the first half of this year, we expect the economy to benefit from a swing in the inventory cycle and a continued growth in household and government spending . . . " " . . . we would like to return the federal government to a surplus position and that this will happen as our economy gathers momentum and discipline is exerted in the budget process . . . " ... [more] 8:44:28 AM  Google It!  comment  []

New Reports Point to Rebound in Economy March 14, 2002 "The deficit in the nation's broadest measure of trade narrowed slightly to $417.4 billion last year, still the second highest imbalance on record . . . The Commerce Department said last year's current account trade deficit, measuring the flow of not just goods and services but also investment across the U.S. border, was down by 6.1 percent from the all-time high of $444.7 billion set in 2000." "In another report, the Commerce Department said that businesses rebuilt inventories by 0.2 percent in January, the first increase in inventories in a year and another encouraging sign that the country's first recession is a decade has come to an end." "In a third report, the Labor Department said that the number of Americans filing new claims for unemployment benefits fell by 3,000 last week to 377,000." " . . . the current account imbalance last year remained at the second highest level on record. It is expected to show only a slight further improvement this year, something that has many economists worried. To finance this trade deficit, the United States must depend on foreigners' willingness to exchange their cars, crude oil and other products for American dollars, which return to the United States in various investments from stocks and bonds to purchases of American real estate and factories. . . . Greenspan said in a speech Wednesday that it would unrealistic to expect foreign investment to stay at the high levels of recent years for a prolonged period. He said the best way to shrink the current account deficit would be for Americans to increase their record-low savings rate . . . The concern is that at some point foreigners will decide to pull their investments out of the United States, triggering a decline in the value of the U.S. dollar, depressing the value of American stocks and bonds, sending U.S. interest rates prices soaring." ... [more] 8:20:48 AM  Google It!  comment  []