Treasury Secretary John Snow says the U.S. economy is showing signs of a strong recovery, and predicts figures for the fourth quarter of the year will provide further encouragement. He spoke in a series of interviews Sunday on American television.
The treasury secretary said it is too early to declare victory in the battle to rebuild the economy. But, he says there is reason for optimism. "There is still a lot of work to be done. But the signs we saw coming off the third quarter, including the job numbers were very encouraging," he said.
The U.S. economy grew during the third quarter, the period from July through September, at a 7.2 percent annual rate. Meanwhile, new unemployment figures for October showed a substantial increase in the number of workers on payrolls.
During an appearance on CNN's Late Edition, Mr. Snow predicted the economic upswing will continue. He noted, however, that a 7.2 percent growth rate is unusually high and will probably moderate in the months to come. "We will probably see a lower, but still good growth rate in the fourth quarter and I expect for all of 2004," he said.
He said private economists are predicting a four percent growth rate through the rest of this year and into the next. Earlier, he told the Fox News Sunday program the economy is on the right path, although he noted the administration is not happy with the current budget deficit.
Mr. Snow was asked if it will be possible to reduce the deficit while spending billions on the war in Iraq. He said the war expenditures are a one-time event, and over the course of time the deficit can be reduced through a combination of economic growth and curbs on other federal spending. "And I would point out that the financial markets, which are the ultimate judge of such matters, must take us at our word on this commitment, because we have the lowest interest rates in 45 years," he said.
The Bush administration has vowed to cut the federal budget deficit in half during the next five years. The deficit for the past fiscal year, which ended on September 31, was just more than $374 billion.