O'Neill says U.S. economy headed for recovery
biz.yahoo.com
(UPDATE: Recasts, adds comments by Lindsey, Daschle, background)
By Anna Willard
WASHINGTON, Nov 25 (Reuters) - Encouraged by a 4 percent increase in sales on what is traditionally the nation's busiest shopping day, U.S. Treasury Secretary Paul O'Neill said on Sunday the struggling U.S. economy was headed for recovery.
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Some economists had predicted sales would slump 4 percent or more last Friday, the day after the U.S. Thanksgiving holiday. There were concerns that consumer confidence, already dimmed by a slowing economy, had taken an additional hit from the Sept. 11 attacks on the United States.
``The number that I saw earlier this morning indicated holiday sales on Friday were 4 percent over a year ago,'' O'Neill told ABC's ``This Week'' show, according to a transcript of the program.
``That doesn't sound to me like a weak consumer,'' he added.
Consumer spending accounts for about two-thirds of the U.S. economy and officials from the White House on down have urged shoppers to keep buying despite concerns raised by the Sept. 11 attacks by hijacked commercial airliners that killed several thousand people.
Wal-Mart Stores Inc.,(NYSE:WMT - news), the world's largest retailer, reported record one-day sales on Friday of $1.25 billion and said shoppers continued to visit the chain in droves on Saturday.
O'Neill said the economy had now moved back to the recovery phase he believed it was in before Sept. 11.
``I think if you look at the date on September the 10th, we were in the beginning of a recovery phase, and I think we've moved back there,'' he said.
O'Neill said he expected the U.S. economy to recover early next year, with growth likely to pick up as 2002 continues.
``I think we will see a recovery in the U.S. economy beginning early next year and growing as we move through the rest of the year,'' he said.
NO WORD ON RECESSION
The treasury secretary would not say if he believed the economy was in recession, the same position taken by top White House economic adviser Lawrence Lindsey, who appeared on ``Fox News Sunday.''
Asked about recession, Lindsey said: ``I don't know. That's a statistical question. We won't know for many months.''
The U.S. economy shrank by 0.4 percent in the third quarter, the first time gross domestic product contracted since 1993. A recession is generally defined as two successive quarters of negative growth.
A U.S. committee that decides the official dates of recessions met on Friday to determine whether the world's largest economy had actually slid into one. The National Bureau of Economic Research has not yet released the results of the discussion.
SENATE MUST ``FINALLY JUST PULL TOGETHER''
O'Neill repeated his call for a congressional stimulus package to help ensure the economy gets back on its feet, and blasted the Democratic-led Senate for not enacting President George W. Bush's proposed $75 billion package.
``The Senate has dithered an awful long time in responding to the president's request for a stimulus package,'' he told CNN's ``Late Edition.''
``The elements the president wanted are in the House bill. The Senate needs to get its act together.''
While the House has passed a $100 billion economic package, the Senate is deadlocked over its version, with Democrats and Republicans fighting over whether more emphasis should be on tax cuts or on measures to expand employment benefits and subsidized health insurance for laid-off workers.
O'Neill said he hoped senators ``will finally just pull together'' to come to a position on the package this week when they return from their weeklong Thanksgiving break.
Asked if he expected a deal from the Senate, he said, ``Well, I think there can be a response to what the president has asked for.''
Senate Democratic leader Tom Daschle, also on Fox News, said the Senate would vote on the bill before Christmas.
``We have to. It's our strong desire to do that,'' he said. ``We're going to try to get this thing done, this job done.'' |
