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CNN Live Saturday
Does U.S. Need a Shot in the Arm?
Aired April 26, 2003 - 16:33 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.
ANDERSON COOPER, CNN ANCHOR: There are plenty of signs the U.S. economy needs some kind of shot in the arm. Kathleen Hays checks some trends you might have missed.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): The U.S. economy remains stuck in a low gear in the first three months of the year. It grew at a disappointing 1.6 percent annual rate as consumer spending slowed and business investment turned negative.
WILLIAM SULLIVAN, MORGAN STANLEY: We're seeing an unwillingness of businesses to ramp up capital spending, notwithstanding the lowest interest rate environment in 40 years. And I think that's more attributable to the excess capacity that we have here and in the global economy.
HAYS: Hopes for a pickup in the economy brightened with news of a sharp upturn in consumer sentiment in April.
JOHN SILVIA, WACHOVIA SECURITIES: I think the consumer sentiment number is more important, because that's a forward looking, leading economic indicator and I think that's a post-war indicator of improving consumer sentiment as well as the likelihood of improving consumer spending.
HAYS: As for the housing sector, the news on sales in March was mixed. Sales of owner-occupied homes fell, from a record level reached in February, but sales of new homes rose sharply.
Bottom line, economists said housing may be off its peaks, but low mortgage rates are keeping it on a firm footing. What's not on a firm footing is business spending. Purchases of things like new equipment, new machinery, new computers, that's what has most economists worried.
JOHN LONSKI, MOODY'S INVESTORS SERVICES: And it will not be until companies are willing to expand their activity, that is, step up capital spending, that companies will, at the same time, add significantly to staff.
HAYS (on camera): The Federal Reserve has been saying for months that the economy can't really pick up steam until businesses start investing again. That's why this may be an important topic when Federal Reserve Chairman Alan Greenspan testifies to Congress next week. Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired April 26, 2003 - 16:33 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: There are plenty of signs the U.S. economy needs some kind of shot in the arm. Kathleen Hays checks some trends you might have missed.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): The U.S. economy remains stuck in a low gear in the first three months of the year. It grew at a disappointing 1.6 percent annual rate as consumer spending slowed and business investment turned negative.
WILLIAM SULLIVAN, MORGAN STANLEY: We're seeing an unwillingness of businesses to ramp up capital spending, notwithstanding the lowest interest rate environment in 40 years. And I think that's more attributable to the excess capacity that we have here and in the global economy.
HAYS: Hopes for a pickup in the economy brightened with news of a sharp upturn in consumer sentiment in April.
JOHN SILVIA, WACHOVIA SECURITIES: I think the consumer sentiment number is more important, because that's a forward looking, leading economic indicator and I think that's a post-war indicator of improving consumer sentiment as well as the likelihood of improving consumer spending.
HAYS: As for the housing sector, the news on sales in March was mixed. Sales of owner-occupied homes fell, from a record level reached in February, but sales of new homes rose sharply.
Bottom line, economists said housing may be off its peaks, but low mortgage rates are keeping it on a firm footing. What's not on a firm footing is business spending. Purchases of things like new equipment, new machinery, new computers, that's what has most economists worried.
JOHN LONSKI, MOODY'S INVESTORS SERVICES: And it will not be until companies are willing to expand their activity, that is, step up capital spending, that companies will, at the same time, add significantly to staff.
HAYS (on camera): The Federal Reserve has been saying for months that the economy can't really pick up steam until businesses start investing again. That's why this may be an important topic when Federal Reserve Chairman Alan Greenspan testifies to Congress next week. Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
