Economy resilient, stimulus is working: White House

Thu Jul 31, 2008 12:15pm EDT
 
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WASHINGTON (Reuters) - A pickup in second-quarter U.S. growth showed the economy's resiliency and that there was no need for another stimulus package because the first one was working, senior White House advisers said on Thursday.

"We do believe the effects that we've seen in terms of the stimulus will continue," Ed Lazear, chairman of the Council of Economic Advisers, told CNBC television.

"There is a lot left to be spent and we expect that to play out in the second half of the year," he said after the government reported second-quarter growth advancing at a 1.9 percent annualized pace from 0.9 percent in the first quarter.

Democrats, however, say a second government stimulus package is warranted by rising unemployment as the country's housing slump chills growth, but President George W Bush's Republican administration does not agree.

"I think the best reason to have a second stimulus is because we are three months away from an election, not because we've got new economic data," said White House Budget chief Jim Nussle during the CNBC television interview, referring to the U.S. presidential election on November 4.

"I think the politicians are much more concerned about the polls than the economic data," he said.

U.S. growth was revised to show a contraction of 0.2 percent in the fourth quarter of last year, the weakest performance since 2001, but its subsequent recovery was an encouraging sign of its underlying resilience.

"As we went into each quarter this year, the pessimists seemed to have us having negative growth, going into recession; the optimists seem to have won the day," Lazear said.

(Reporting by Alister Bull; Editing by Theodore d'Afflisio)

 

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