Treasury Secretary Denies Recession Existed as US Non-Manufacturing Index Surges

06 March 2002

Yet more evidence that the US economy is on the road to recovery was reported Tuesday by the Institute of Supply Management. New orders during February grew by 9.1 points to 58.7 – well ahead of the most bullish forecasts and the highest point reached by the index since November 2000.

Furthermore, the recession was a mere figment of the nation’s collective imagination, according to US Treasury Secretary Paul O’Neill.

Possibly overcome by jetlag en route to Kuwait, O’Neill opined it to be “now quite clear” that the economy had never suffered a recession and was on course for rapid recovery [although none among his audience was sufficiently impolite to inquire 'recovery from what?'].

Recalling Disraeli’s aphorism about lies, damn lies and statistics, O’Neill said the US had not met the most commonly used definition of recession – two consecutive quarters of declining GDP – and went on to forecast “substantial growth” for the American economy in 2003.

Meantime, in the real world, February's robust data indicates that “we have broken out and will continue to grow,” according to Ralph Kauffman, chairman of the ISM survey committee. The surge in new orders was evident across non-manufacturing sectors as disparate as retail, mining and legal services.

Data sourced from: The Wall Street Journal Online and The Times Online (London); additional content by WARC staff