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Greenspan to Report on Economic Signs

February 12, 2001|Bloomberg News

Federal Reserve Chairman Alan Greenspan will tell Congress this week whether the economy shows signs of sliding into recession or if it's set to rebound from close to zero growth in coming months. If recent comments from his colleagues are any indication, Greenspan's message to the Senate Banking Committee during his semiannual economic report Tuesday will be that economic growth is set to pick up later this year. "A lot of the traditional signs of a recession are simply not visible," said William Poole, president of the St. Louis Fed, in an interview last week. Analysts said that won't keep policymakers from cutting their benchmark overnight bank lending rate another quarter percentage point at their next meeting March 20. Statistics due out this week will probably reinforce Greenspan's testimony to the Senate Budget Committee on Jan. 25 that growth has fallen close to zero. Output by U.S. factories, mines and utilities probably stalled in January after falling 0.6% in December, analysts said, highlighting the most visible weakness in the economy--manufacturing. The Fed is scheduled to release the data Friday. Meanwhile, the American Machine Tool Distributors Assn. and the Assn. for Manufacturing Technology reported Sunday that U.S. machine tool demand, often seen as a key economic indicator, rose 21.8% in December from the month before. Demand was down 5% from $541 million estimated in December 1999.

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