Greenspan talks up US economy recovery

The US Federal Reserve chairman has spoken about America recovering from what many believe to be the mildest recession on record…

The US Federal Reserve chairman has spoken about America recovering from what many believe to be the mildest recession on record.

Mr Alan Greenspan said a lot of the credit goes to technology that allows businesses to adjust quickly to changing economic conditions.

He made his remarks in a speech delivered via satellite to the Institute of International Finance, in New York.

Mr Greenspan said the American economy, jolted by the September 11th attacks, had shown an "impressive ability" to withstand some hard knocks, including a drop in the stock market and a sharp cutback in capital spending by businesses, a key reason the economy fell into a slump.

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He added that such resilience likely reflected US companies' use of computer and other technology providing them with real-time information.

"That information was used to help companies better respond to a changing business climate," he said.

For instance, moving to whittle stockpiles of unsold goods at early signs of a slowdown, rather than adding to them.

He added: "Doubtless, the substantial improvement in the access of business decision-makers to real-time information has played a key role.

"Thirty years ago, the timeliness of available information varied across companies and industries, often resulting in differences in the speed and magnitude of their responses to changing business conditions."

Many economists believe the US economy, as measured by GDP, grew by 5 per cent in the first quarter of this year. Official figures are released on Friday.

PA