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Treasury chief says economy recovering
Encouraged by a 4 percent increase in sales on what traditionally is the nation's busiest shopping day, Treasury Secretary Paul O'Neill said Sunday that the struggling U.S. economy was headed for recovery.
Some economists had predicted that sales would slump 4 percent or more Friday, the day after the Thanksgiving holiday. There were concerns that consumer confidence, already dimmed by a slowing economy, had taken an additional hit from the Sept. 11 terrorist attacks on the United States.
"The number that I saw earlier this morning indicated holiday sales on Friday were 4 percent over a year ago," O'Neill said on ABC's "This Week" program. "That doesn't sound to me like a weak consumer."
Consumer spending accounts for about two-thirds of the U.S. economy, and officials from the White House on down have urged shoppers to keep buying despite concerns raised by the Sept. 11 attacks, which killed thousands of people in New York, near Washington and in western Pennsylvania.
Wal-Mart Stores, the world's largest retailer, reported record one-day sales Friday of $1.25 billion and said shoppers continued to visit the chain in droves on Saturday.
O'Neill said the economy had moved back to the recovery phase he believed it was in before Sept. 11.
"I think if you look at the date on September the 10th, we were in the beginning of a recovery phase, and I think we've moved back there," he said.
O'Neill said he expects the economy to recover early next year, with growth likely to pick up as 2002 continues. He also repeated his call for a congressional stimulus package to help ensure the economy gets back on its feet.
The House has passed a $100billion economic package, but the Senate is deadlocked over its version. President Bush has proposed $75 billion package. Senate Majority Leader Tom Daschle (D-S.D.) said Sunday that the Senate would vote on a bill before Christmas.
The treasury secretary would not say whether he believes the economy is in recession. The U.S. economy shrank by 0.4 percent in the third quarter, the first time gross domestic product has contracted since 1993. A recession generally is defined as two successive quarters of negative growth.