Reuters Market News W.House's Hubbard-U.S. economic recovery "typical" Wednesday September 25, 11:24 pm ET
(Adds detail, quotes) NEW YORK, Sept 25 (Reuters) - White House Council of Economic Advisers Chairman Glenn Hubbard on said Wednesday the U.S. economic recovery was proceeding at a "typical" pace and he downplayed worries that talk of a U.S. attack on Iraq may be dampening it. ADVERTISEMENT Echoing the views of most private sector forecasters, Hubbard said he expected the economy to expand by better than 3 percent during the third quarter. Some economists are forecasting third-quarter gross domestic product growth of 4 percent or higher thanks to robust consumer spending. "The economy's recovery looks pretty typical," Hubbard told CNBC Television. Hubbard added that while consumer confidence has tumbled recently, the actual level still remained "quite high" and income growth remained strong. Major gauges of consumer confidence have slipped from peaks hit during the spring but consumer spending has held up, in part from households taking advantage of the lowest mortgage rates in a generation and cashing in on home equity. Zero interest rate financing deals on autos has also spurred a flurry of consumer spending. Hubbard predicted businesses would begin to do their part to help the recovery -- something Federal Reserve officials have said is key to making the recovery sustainable -- by the last three months of the year. "The consumer holding out should signal a (business) investment turnaround around the time of the fourth quarter," Hubbard said. Jitters over a possible military showdown with Iraq have dented stock prices and sent investors fleeing to safe-haven assets. Oil prices have shot up about 40 percent this year to more than $30 a barrel, making some analysts fret about a drag on what has so far been an uneven recovery. "Uncertainty on the international stage can have a damper on economic activity," Hubbard said. "I don't think that's contributing as much as the uncertainty about the pace of the economy itself," he added. Heavy selling on world stock markets -- which this week drove major equity indexes to multi-year lows -- is mainly a reflection of the lingering damage on investor confidence from corporate accounting scandals, Hubbard said. "The market is not always a good predictor of how the economy is currently doing," he said.
