--Retransmitting Story Initially Headlined 13:35 EDT Friday
--Welcomes Possible Addition of Susan Bies to Fed Board
--Seeing 'Cyclical' Deterioration in Productivity Growth
--Hopes Manufacturing Will 'Bottom Out Shortly'

PHILADELPHIA (MktNews) - It is "unlikely" that second-quarter U.S. economic growth exceeded the 1.3% revised pace of the first quarter of 2001, Philadelphia Federal Reserve Bank President Anthony Santomero said Friday afternoon.
Taking questions from reporters after addressing a Risk Management Association leadership conference, Santomero noted that he was not surprised by the downward revision in first-quarter GDP from 2.0% to 1.3% and that the preliminary figure "seemed quite high at the time."
He added, "I think that the second quarter is unlikely to beat that statistic (1.3%), but I am anticipating that the economy will start to rebound in the second half."
Reacting to the not yet official news of the day that the White House would be nominating Tennessee banker Susan Bies to the Federal Reserve Board, Santomero said, "I welcome an addition to our membership."
He said the Fed Board has done well to work for so long with two vacancies. Federal Reserve Governor Edward Kelley announced earlier this week he would step down as soon as another member is added. The Board currently has a minimum five members required by law to conduct its operations.
Looking ahead, Santomero cited an expected positive impact on the economy from the fiscal stimulus coming in the form of the tax cut signed into law Thursday by President Bush.
"You really have two things affecting the economy in the third quarter, both the rebate and the reduction in rates. ... As a result, it is likely to have a larger impact" than just reductions without the rebate, he said.
Asked about the recent slippage in the rate of productivity, Santomero did not express great concern, saying, "Productivity has always been cyclical."
"We're going through a cyclical deterioration in productivity" associated with slower growth, he added.
Santomero also expressed optimism that some weaker sectors in the economy may soon experience a turnaround.
"I hope that manufacturing will bottom out shortly," he said, keeping his Philadelphia district specifically in mind.