O'Neill: No U.S. Recession in 2001

U.S. Treasury Secretary Paul O'Neill said on Tuesday that the world's biggest economy was on solid ground and had not suffered a recession in 2001.

O'Neill, touring the Middle East for talks on economic and security, told reporters that contrary to a declaration by the National Bureau of Economic Research (NBER), which dates U.S. business cycles, a recession had not set in last year.

"It seems quite clear now that our economy never suffered a recession," O'Neill told a news conference. 

The U.S. Treasury chief noted that, while gross domestic product contracted during the third quarter last year, latest government statistics show expansion resumed in the fourth quarter. That means a popular definition of recession as being at least six months of declining output was not met. 

Last November the NBER's business cycle dating committee said the U.S. economy had entered a recession in March 2001 after a 10-year expansion. 

The NBER defines a recession as "a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade," according to the group's web site

O'Neill said "economic fundamentals are moving back into place" in the United States and predicted growth rates will gradually increase this year to reach an annual rate of three to 3.5 percent a year by year-end. 

He added that 2003 should see "substantial growth for the U.S. economy" but did not predict a growth rate.