Greenspan Finds Jan Rise In Durable Goods 'Encouraging'
27 Feb 13:36
WASHINGTON -(Dow Jones)- Federal Reserve Chairman Alan Greenspan said
Wednesday that he was impressed by the 2.6% increase in orders for U.S.
durable goods in January, although he said it's not clear that a sustainable
recovery in business investment is underway.
"Durable goods were somewhat better than I would have expected," Greenspan
told the House Financial Services Committee. "If they continue that way, then I
think things will clearly improve." But it's too early to be sure of a strong
rebound in business spending on equipment and other capital goods, he said.
Greenspan has said the strength of the economic recovery expected this year
will depend to a considerable degree on the strength of the rebound in capital
spending, which has declined over the last year. He predicted, however, that
capital spending will increase only gradually this year.
Greenspan said the government's report on durable goods, released Wednesday,
showed that "a number of elements in the capital-goods markets are still quite
weak," including telecommunications. "Clearly it's encouraging that the markets
are coming back." But they slumped steeply last year, and "it's going to take a
while to be sure that we're getting the type of response that we're going to
ultimately need."
Greenspan also said the housing market may not be as hot as it seemed in a
recent report that showed existing-home sales rose 16% in January to a record
annual rate of 6.04 million units. "That's clearly not going to be sustained,"
he said.
-By Joseph Rebello, Dow Jones Newswires; 202-862-9279;
joseph.rebello@dowjones.com
(This story was originally published by Dow Jones Newswires)
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