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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Gordon A. Langston who wrote (118934)	12/21/2000 7:35:18 PM
From: peter a. pedroli	Respond to of 769669

well even the Washington post is seeing the CLINTON GROWTH RECESSION coming. washingtonpost.com U.S. Economic Growth Slows Sharply By Martin Crutsinger AP Economics Writer Thursday, Dec. 21, 2000; 7:15 p.m. EST WASHINGTON –– The economy braked to a four-year-low in growth of just 2.2 percent in the July-September quarter, further evidence that America's booming economy is rapidly cooling off. A downward revision Thursday by the Commerce Department in the gross domestic product for the third quarter sent private economists scurrying to lower their forecasts for the current quarter and next year. While few are predicting an outright recession, many said the economy has definitely entered a "growth recession" in which output keeps expanding but at such a slow pace that the unemployment rate rises. The Clinton administration, however, took issue on Thursday with recent comments by both President-elect Bush and Vice President-elect Dick Cheney that the country could be on the leading edge of a recession. Both Bush and Cheney have used the slowdown as a key reason for urging Congress to pass Bush's $1.3 trillion tax cut. Gene Sperling, Clinton's national economics adviser, said most forecasters are still predicting moderate growth for next year with low inflation and only a slight rise in unemployment. "With most private sector forecasters still projecting a soft landing and solid growth for next year, the next president and his team should not be talking down our economy and potentially hurting confidence just to gain short-term political positioning," Sperling said in an interview with The Associated Press. Treasury Secretary Lawrence Summers, interviewed on CBS, said it was "a mistake to lose sight of some very strong fundamentals." He said the economy is in very good shape at the present time compared to the problems of a decade ago. Bush insisted that all he has been doing is pointing to warning signs in the economic data. "If there are warning signs on the horizon, we need to pay attention to them," he told reporters in Austin, Texas. Cheney, separately, responded to the criticism by saying there was "a lot of evidence out there" of a slowdown and "whether or not this ultimately results in a recession ... nobody knows at this time." On Wall Street, the Dow Jones industrial average shrugged off further profit warnings and fears about the weakening economy to post a gain of 168.36 points, closing at 10,487.29. The technology-heavy Nasdaq ended a seven-session losing streak with a small 7.64 gain to close at 2,340.42. Federal Reserve Chairman Alan Greenspan, in his most recent comments about the economy, said policy makers must be alert to the danger that an unexpected event, such as a sharp rise in energy prices or a big drop in the stock market, could derail the economy. The worry, analysts said, is that consumers and business, two of the driving forces of the economic boom, will suddenly decide to cut back on spending and investment. "You can talk yourself into a recession. It is the drop-off in consumer confidence that economists find most alarming," said David Wyss, economist at Standard & Poor's in New York. Bruce Steinberg, chief economist at Merrill Lynch, said the soft landing the Federal Reserve was trying to engineer with its six interest rate increases from June 1999 to May of this year will be a little harder than expected. "The U.S. economy is in the midst of what we have been terming a rough landing," he said. He predicted that GDP growth over the next four quarters will average around 2.5 percent. Wyss said he was forecasting that the unemployment rate over the next year will rise by nearly a full percentage point to around 4.8 percent, meaning an additional 1.5 million people will lose their jobs. That would represent a significant change from the past four years, when the supercharged economy raced ahead at growth rates above 4 percent, the best sustained growth period since the early 1960s. That helped push the unemployment rate down to a 30-year low of 3.9 percent in September and October. In another sign that the slowdown is having an impact, the Labor Department said Thursday that the number of Americans filing first-time claims for jobless benefits rose by 34,000 to 354,000 last week, pushing the four-week moving average to the highest level in more than two years. The 2.2 percent final estimate for GDP growth in the July-September quarter was less than half the 5.6 percent growth recorded in the April-June quarter. It represented a downward revision from a month ago when the government put third-quarter GDP growth at 2.4 percent. The Commerce Department's new report showed that the slowdown was having the desired effect on inflationary pressures with an index tied to the GDP rising at a rate of just 1.6 percent in the third quarter, down from an estimate a month ago that prices were rising at a 1.9 percent rate in the summer. The Fed on Tuesday switched its policy directive away from inflation worries to concerns about economic weakness, a 180-degree turnabout that represented a strong signal that the central bank will start cutting interest rates at its next meeting on Jan. 30-31. Many analysts are forecasting three to four rate cuts next year as the Fed moves to keep the slowdown from weakening furth