Return to Transcripts main page
CNN Live Saturday
Interview With Laura Cohn
Aired December 29, 2001 - 16:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MARTIN SAVIDGE, CNN ANCHOR: Will the new year bring a stronger economy? That's the question on many people's minds. Laura Cohn is a correspondent for "Business Week" magazine, specializing in the economy, energy policy and the Federal Reserve. She joins us today from New York. Good afternoon to you, Laura, thanks for joining us.
LAURA COHN, "BUSINESS WEEK": Hi. Thank you.
SAVIDGE: All right, so the wrapping is off all the gifts and the needles are probably off all the trees. How did the holiday season shape up when it came to shopping and finances?
COHN: Well, it depends on whose perspective you're talking about. If you're talking about for consumers, it was a great holiday because we saw a lot of price cuts on everything from women's apparel to cars to anything you would want to buy for the holiday season. But if you're talking about from company's point of view, that's a different story, because while they were cutting prices, that means that their profit margins aren't going to be as good once we get into the new year.
SAVIDGE: Do we know how bad it really was yet?
COHN: We probably won't know for a couple of weeks, but once we get into the earnings season and we see what the retailers say how they did for the holiday season, then we'll know. But in the meantime, the stock market really does seem to be holding its own.
SAVIDGE: One of the things I noted was unemployment went up, this after three weeks of going down. Any reason why?
COHN: Yeah, I mean, we are seeing less layoffs in the marketplace, we're seeing perhaps the job market stabilize a little bit. But there may be some more pain ahead. Later next week, we get the unemployment report, and we may see the number actually go higher. Unemployment may actually approach 6 percent, which would be the first time in a while we've seen a number like that.
SAVIDGE: You mentioned the stock market holding its own. The reason for that?
COHN: Again, consumer confidence is coming back a wee bit. We are seeing fewer layoffs. So investors are starting to think, maybe we are nearing a bottom on the economy. And in fact, the Dow Jones Industrial Average ended the year above where it began before September 11, so we are actually seeing some hopeful signs in the economy.
SAVIDGE: Well, I don't want to put a cloud on the horizon, but OPEC -- they acted to cut back oil production. How is that likely to impact the U.S. economy?
COHN: That will have an impact. We did actually see prices come off a little bit after the OPEC announcement, because it had been largely expected. Right now, energy prices are relatively low, which is also good news for consumers, because it means we're going to be spending less money at the gas pump, and we're going to have cheaper home heating bills this winter.
SAVIDGE: And it's been relatively mild up to this point for those people using the heating oil.
COHN: Yeah, that's right, except for the people in Buffalo, unfortunately.
SAVIDGE: Using a lot of gas on the snowblower now. 2002, the outlook, say, for the beginning of the year is what?
COHN: We may see some slowing in the beginning, but people are expecting by summer that we will return to positive growth and perhaps end the year at around 2 percent growth, which like I said, is a comeback, but it's much lower than what we saw in the late '90s during the boom years. We're used to see growth of around 5 percent. So while we will be coming back somewhat, it's going to be well below the levels we saw during the boom in the '90s.
SAVIDGE: At the end of this year, we are still very hesitant to officially talk about the "R" word of recession. For 2002, do we dare use the other R word, recovery?
COHN: Yeah, I think we can. Most of the smart economists on Wall Street are saying that given the low energy prices, which you mentioned earlier and some of the other price cuts at the stores, we should see the economy start to come back, and especially if we see fewer layoffs. That means that consumer psychology is going to come back, consumer confidence could come back, so we will get growth in positive territory hopefully by mid-year and definitely by the end of the year.
SAVIDGE: All right. Well, you know what that means, Laura Cohn of "Business Week," we're going to have to have you back just to see how accurate you were. Thanks very much for being with us.
COHN: Thank you, Marty.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
