--O'Neill: "Real possibility" of economic pickup in Q4
--O'Neill says US economy not currently in recession
By Edward Kean Washington, Jun 18 (Bridge News) - U.S. Treasury Secretary Paul O'Neill Monday estimated the U.S. economy is growing at an annual rate of about 0.5-1.0% and said there is a real possibility that growth will accelerate later this year, especially in the fourth quarter.
In an interview on PBS's "Charlie Rose" show, O'Neill said he did not believe the U.S. economy was engulfed in a recession. "At the moment, I do not see that," he said. It is important that the U.S. economy strengthen from its current pace, O'Neill said. "We need to operate at 3-3.5% growth," he said.
He indicated he thought the U.S. economy would return to such a pace next year. O'Neill declined to say whether the Federal Reserve, which has slashed its key short-term interest-rate target by a total of 2.5 percentage points this year, should cut interest rates further. However, O'Neill praised the performance of Fed Chairman Alan Greenspan. "I think he's doing a great job," O'Neill said, noting that he sometimes talks to Greenspan more than once a week.
Discussing different parts of the economy, O'Neill said the economic slowdown has not particularly damaged demand for homes and cars. Also same-store retail sales are "not bad," he said. However, he said, the telecommunications industry is "on its back." O'Neill also predicted the federal debt would be reduced to zero, but did not give a timetable.