WASHINGTON (AP) -- Recent economic data indicate the economy has hit bottom, but any expansion so far is too small to measure, Federal Reserve Chairman Alan Greenspan said yesterday.
Mr. Greenspan, testifying before the House Ways and Means Committee, said that statistics "over the last several weeks strongly suggested that the bottom is somewhere in the second quarter," which ends June 30.
He added, however, that "we see no measurable upward thrust" and said that employment is likely to remain sluggish for a while even when a recovery begins.
"It's a matter of a few months at most" between the time recovery begins and the jobless situation shows significant improvement, Mr. Greenspan said.
He refused to be more specific about when he expects the economy to resume growing and the unemployment rate to drop. But the number of jobless workers who exhaust unemployment benefits "should start to become less onerous relatively soon," he said.
The recession began last July, ending a record eight-year peacetime
economic expansion. Recent signs of a rebound include a decline in new claims for unemployment insurance and increases in May in retail sales and industrial production.
The Commerce Department said yesterday that housing starts edged up 0.1 percent last month, the third increase in four months. Builders started construction on new homes and apartments at a seasonally adjusted annual rate of 982,000 units. Analysts said the report confirmed their view that the housing recovery would be slower than normal.
Mr. Greenspan appeared before the House panel to discuss improving the ability of the United States to compete with other nations. The toppriority should be to increase savings and investment and to cut the budget deficit, he said.
His remarks on the economy were much the same as comments he made two weeks ago at an international conference of central bankers in Japan. The Fed chairman said then that recent data indicated that the economy was "moving toward first stability and some recovery" but that it was "not yet at the point" where it was clearly moving up.
David W. Mullins Jr., a member of the Fed's board, offered a similar assessment in an appearance yesterday before the Senate Banking Committee, which is considering his nomination as Fed vice chairman.