A drop in US business inventories and a rise in consumer spending in the first quarter could pave the way for "less dreary" figures on US output, a top economic adviser to President Barack Obama said on Wednesday.
"There's perhaps a little bit of a silver lining," Christina Romer, the head of the White House Council of Economic Advisers, told Reuters Financial Television in reaction to news the US economy contracted at a 6.1 percent annual rate in the first quarter.
"To the degree that that's a sign that firms are bringing down some of their inventories ... that combined with consumers coming back to life could mean we need to start to producing things again," she said. "It could put us in a position for perhaps a less dreary number going forward."
Romer said private-sector forecasts for a 1 percent to 2 percent rate of decline in the second quarter seemed on the mark. "We absolutely expect to bottom out (in the second half of the year) and maybe by the end of the year see some positive growth," she said. Asked about the potential economic impact the swine flu outbreak could have on the US economy, Romer said it was too soon to gauge and that it would depend on the impact it had on public health.
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