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Snow Foresees Steady Growth

In TV interviews, the Treasury secretary gives a rosy assessment of the economy for the fourth quarter and next year.

November 10, 2003|From Times Wire Services

Treasury Secretary John W. Snow said Sunday that he foresaw steady economic growth during the final three months of this year and throughout 2004.

"I'm not in the business of making forecasts, but the private sector forecasts that I've seen are around 4% for the fourth quarter and around 4% for next year," he said. "Those look like reasonable forecasts to me."

The broadest measure of the economy's performance, gross domestic product, grew at a remarkable 7.2% annual rate from July through September, more than double the 3.3% rate in the previous quarter.

"That 7% growth rate we saw in the third quarter is unusually high, and we'll probably see a lower but still good growth rate in the fourth quarter and, I expect, for all of '04," Snow said on CNN's "Late Edition."

Snow also appeared on the "Fox News Sunday" program.

"I think the economy is clearly on the right path," Snow said. "We're beginning to see signs of a good recovery."

Businesses also have started hiring workers, with the Labor Department reporting on Friday that 126,000 jobs were added in October and the unemployment rate fell to 6%. It was the third straight monthly gain in jobs.

The economic figures may help President Bush fend off criticism from Democrats, who are seeking to unseat him in next year's election, that the tax cuts he championed over the last two years have done little to spark employment.

Snow said the lag in job creation was partly the product of the restructuring of the U.S. economy from a manufacturing-based economy to one in which service industries account for a bigger portion of economic output. Still, he said, "Our manufacturing sector alone is 60% bigger than the entire Chinese economy."

Snow also cited "extraordinarily high" productivity as a factor, which "has also meant that manufacturers can do more with less, and that's hurt jobs in the manufacturing sector."

The economy has lost 1.1 million jobs since the last recession ended in November 2001 and more than 2.3 million since Bush took office in January 2001.

Manufacturers shed 24,000 jobs last month, the 39th consecutive month of declines. Factory job losses have averaged 53,000 a month for the previous 12 months.

Sen. John F. Kerry of Massachusetts, one of nine Democrats seeking their party's nomination to challenge Bush in 2004, said in a separate interview that economic figures released in the last two weeks masked the number of people who have given up looking for work.

He said on CBS' "Face the Nation" program that 250,000 people had dropped out of the job market in the last month, meaning that they were not counted in unemployment figures. "They're not even recorded in this so-called recovery," Kerry said.

Snow said he was confident that as the economy grew, manufacturing jobs would return.

"In the past we've created lots of jobs, and we will continue to create lots of jobs," Snow said.

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Associated Press and Bloomberg News were used in compiling this report.

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