A spokesman for the Bush administration says forward-looking indicators continue pointing to an end in the U.S. recession. The industrial sector showed growth in February for the first time in a year and a half.
Randall Kroszner told the Institute of International Bankers Monday that certain economic data support the belief that the United States is rebounding from its recession.
The University of Chicago economics professor said the purchasing managers' index, which is the leading indicator of industrial production, rose above 50 percent in February.
"Now the way the Index works is if it's above 50 percent, we're going to be having a manufacturing expansion… Now this is heartening because if you look at industrial production, industrial production has been contracting for about the last 18 months," Mr. Kroszner said.
Randal Kroszner also says surveys of purchasing managers indicate that over the next few months, orders are increasing so much there is talk of a full turnaround in the industrial sector.
The other indicator showing promise is the unemployment rate, he says, though not as much as the purchasing managers' index. Professor Kroszner says the unemployment rate right now shows the contraction of the economy is slowing down. In other words, unemployment is not getting worse.
Still, he said the Bush administration does not believe everything is rosy. "We still have to worry about the manufacturing sector, we still have to worry about employment, and so I don't want to say that everything is perfect, but it does seem like most of the forward looking indicators are fairly optimistic and most of the numbers have been coming in perhaps a bit above market expectations," Professor Kroszner added.
Federal Reserve Chairman Alan Greenspan agrees. He told Congress last week he saw signs of a slow recovery, but was cautiously optimistic. He also made no mention of raising short-term interest rates that, at 1.75 percent, are at a 40 year low.