<U.S Economy>Threat to current economic expansion subsides-Treasury.
Lee:
I may be allowed to quote Drew 'we are gonna be rrrrrrrrich'.<g>
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Treasury Department Says Threat to Current Economic Expansion Has Subsided
Washington, Feb. 2 (Bloomberg) -- The U.S. economy has
rebounded and thrived after last year's financial market
turbulence and 1999 promises to deliver more growth and low
inflation, the Treasury said.
''The immediate threat to the current economic expansion
clearly has subsided,'' John Auten, director of the Treasury's
office of macroeconomic analysis, told a panel of Wall Street
executives who advise the Treasury on market borrowing. ''Indeed
the economy picked up speed late last year.''
The gross domestic product, the nation's total output of
goods and services, increased at a 5.6 percent rate in the fourth
quarter, the strongest showing in more than two years, driven by
consumer spending. Unemployment is at a 28-year low. Inflation
for all of 1998 was the lowest in four decades, as tracked by the
GDP price deflator.
The outlook for the new year is positive, Auten said,
although the first quarter's growth rate will probably fall short
of the fourth quarter pace. ''A slower pace of real growth in the
current quarter seems likely to develop for statistical reasons
alone, although without necessarily implying much significant
change in the underlying pace of activity,'' Auten said.
All in all, ''it would have been difficult to have imagined
a much more favorable set of economic statistics than has
recently appeared,'' he said.
Formally known as the Treasury Borrowing Advisory Committee,
the panel is led by Stephen Thieke of J.P. Morgan Securities
Inc. in New York. The meeting was held in conjunction with
tomorrow's announcement of the Treasury's borrowing needs for the
rest of the October-December quarter.
Treasury Benefiting
At the last committee briefing on Oct. 27, the Treasury's
official forecast said the U.S. economy would probably skirt a
recession as financial markets stabilized. ''The most probable
outcome going forward would appear to be growth somewhere near
the economy's potential and the continuation of low rates of
inflation,'' Auten said at the time.
With more than 64 percent of the population working and
capital gains mounting, tax revenue has poured into the Treasury
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