US Treasury Secretary Mr Paul O'Neill is predicting a rosier third quarter with no inflation in the US economy.
"If we go back to a balance [of exports and imports] in the third quarter we can expect a growth in the 3 per cent range. . . . It's a rate that I think will leave us with zero inflation," Mr O'Neill said late yesterday.
He was speaking to business and political leaders in Seattle on the second leg of tour that began in Portland, Oregon, and will continue in Denver, Colorado.
"I think that as we exit this year we'll see growth rates of between 3 and 3.5 per cent," he said. He praised the Federal Reserve and said he expected that its chairman, Mr Alan Greenspan, would continue to follow a "good and appropriate" monetary policy.
Asked about the ailing US airline industry – Mr O’ Neill said one cause of trouble was the excessive cost of insurance premiums that carriers have had to pay since the September 11th terrorist attacks.
He said housing starts should make for a record year and that automobile sales were strong.
The Secretary said the Bush Administration had taken some steps to boost the economy, listing last year's tax cut and an economic stimulus package passed earlier this year.