Snow says economy, jobs on rebound

By Robert Gavin, Globe Staff, 10/10/2003

US Treasury Secretary John Snow said yesterday that the evidence of a rapidly improving economy is "irrefutable and unmistakable" and a rebound in the job market is not too far behind.

Snow, in an interview at The Boston Globe, pointed to a variety of encouraging economic data to bolster his view, including yesterday's report from the Labor Department that first-time claims for jobless benefits fell sharply last week to their lowest level since February. That report comes a week after Labor said the nation ended seven consecutive months of job losses in September and added 57,000 jobs.

"We're now getting into a strong recovery, and with a strong recovery, I'm confident we're going to see a pretty good job pickup in the months ahead," Snow said. "Consumer spending remains strong, housing remains strong, [business] spending has come back, and all of that suggests the job picture has to improve."

Snow came to Boston yesterday to meet with business leaders and talk up the Bush administration's economic policies. The economy, which has rebounded weakly from recession and lost more than 1 million jobs since the recovery began in November 2001, is considered a major vulnerability for President Bush as he prepares to run for reelection next year.

Snow said the administration's policies, which include cutting taxes, opening markets, and encouraging an international monetary system that allows currencies to float more freely against the dollar, will help lead to "plenty of jobs for Americans." Snow said tax cuts are encouraging investment, and US companies are enjoying rapid productivity gains. These will lead to bigger profits and wages, which undergird long-term economic growth, he said.

Among the administration's top priorities, Snow said, are to make these tax cuts, many of which are scheduled to expire between 2005 and 2010, permanent.

Many economists say the tax cuts have helped boost the economy, although they have contributed to a burgeoning federal deficit. The red ink is raising new concerns that interest rates will rise -- and take the steam out of the economy -- as the government borrows more money.

Snow conceded yesterday that the deficit, estimated at nearly $400 billion, is "too big," but added that Bush wants to halve it within five years through economic growth and controlling federal spending. That should keep financial markets and interest rates calm, Snow said.

"A deficit that is sizable, as this one is, but temporary, gets treated a whole lot differently than one that is sizable, but rising and continuing," Snow said. "We're going to make sure it's the former and not the latter."

Robert Gavin can be reached at rgavin@globe.com.