LONDON, 17 July 2003 — US Treasury Secretary John Snow said yesterday the US economy was set for a strong recovery in the second half of this year, while reiterating his support for a strong dollar.
Snow, on a four-day visit to Britain and Germany, told reporters here that he expected the US economy to have grown by just under 2.0 percent in the second quarter.
Growth should pick up to an annualized rate of 3.0 percent in the third quarter and around 3.5 percent by the end of the year, before accelerating to over 4.0 percent in 2004, he said. Snow, whose comments since taking office in February have suggested a softening of the US commitment to a strong dollar, declined to suggest what an appropriate level for the US currency should be at the moment. “It is not a helpful thing for us to forecast what we think are the appropriate levels,” he said. But Snow added: “We have a strong dollar policy. We believe in a strong dollar.” He additionally rejected suggestions that the US Treasury might intervene on the foreign exchange markets, calling such a move “very disruptive”.
Meanwhile, US consumer prices edged higher in June, government figures showed yesterday.
A modest uptick in often-volatile energy and food costs helped push up prices by 0.2 in June from May, and by 2.1 percent from a year ago, the figures showed. But if energy and food costs are stripped out, core consumer prices were unchanged in June alone, and were up only 1.5 percent when compared to June last year.
A breakdown of the latest figures showed energy prices rose 0.8 percent in June and food prices increased 0.4 percent.
Medical care costs advanced 0.3 percent, and housing prices rose 0.1 percent. But new car prices retreated 0.2 percent in the month, resulting in a 1.4 percent decline over 12 months. Used car prices declined 0.6 percent in June, and 3.2 percent during the year. In June, clothing prices fell 0.4 percent, electricity prices dropped 0.4 percent, and personal computer prices tumbled 2.8 percent.
Factories also picked up the pace in June, figures showed yesterday, boosting overall US industrial production and raising hopes of a long-awaited recovery.