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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: J. C. Dithers who wrote (37448)	6/3/2001 12:44:30 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

O'Neill Heartened by Dip in U.S. Unemployment June 3 10:13am ET <<WASHINGTON (Reuters) - U.S. Treasury Secretary Paul O'Neill said on Sunday that things were "not so bad" in the U.S. economy and that he was "heartened" by news that the jobless rate dipped slightly in May. "I was heartened by the news on Friday that the unemployment rate retreated a little bit," O'Neill told "Fox News Sunday." The jobless rate eased to 4.4 percent last month from 4.5 percent in April -- defying economists' predictions that unemployment would tick higher. It was the first drop in the jobless rate since September of last year. Employers shed 19,000 jobs in May. The Treasury chief said automotive sales also came in "remarkably strong" and stood ready to log the second-best year on record if things continued at the current clip. U.S. auto sales released on Friday showed overall sales of cars, pickups, vans and sport utility vehicles fell a less-than-expected 1.2 percent in May, as consumers faced a morass of confusing news on the strength of the U.S. economy, near-record prices for gasoline in some states, and a shower of cash rebates, cheap leases and cut-rate loans. Sales ran at a seasonally adjusted annual rate of 16.7 million vehicles -- well above analyst expectations of 16.1 million. "I think it's not so bad," O'Neill said of the economy, adding that he thought economic growth was currently "bouncing around" somewhere between 0.5 percent to 1.5 percent. There had been fears the U.S. economy risked sinking into a recession but O'Neill has frequently said he is hopeful that such a six-month contraction in the world's richest economy can be averted. O'Neill said fiscal policymakers -- by delivering tax reductions -- and the Federal Reserve -- by slashing interest rates -- had been taking the right steps to prop up the economy. Tax cuts, when fully implemented, should have a lasting effect on economic growth because consumers will have confidence that "taxes are going to go down and stay down," O'Neill said. The biggest tax cut in two decades, the $1.35 trillion compromise package, gives households a refund of up to $600 this year, reduces most income tax rates across the board by three percentage points, and creates a new 10-percent tax bracket. O'Neill said the government would start mailing out refund checks in the week of July 20, with the final batch going out in the week of Sept. 28. On the California energy crisis, O'Neill said he backed the president's stance that what needed to be done was to increase supply as well as conservation.>>