THE US economy is poised for self-sustaining growth and should continue creating jobs in the months ahead, Larry Summers, senior economic adviser to Barack Obama, said in his most upbeat assessment of the economic climate.
In London ahead of yesterday’s strong US payroll figures, which showed the US created 162,000 jobs in March, Mr Summers said the administration’s policies had underpinned confidence and fostered investment.
“The economy appears to be moving towards escape velocity. You hear a lot less talk of W- shaped recoveries and double-dips than you did six months ago.”
The March data, which showed unemployment unchanged at 9.7 per cent, will add to Mr Summers’s confidence in his prediction last December that the economy would stop losing jobs by this spring.
The US administration still stresses that there are challenges ahead and points to the tendency for recovery from asset-price recessions to be slow.
However Mr Summers put part of his confidence in the economy down to the still-significant stimulus coming from the monetary loosening during the crisis and the government spending that will continue through 2010. “The process of recovery seems to have started earlier and more vigorously than was common in such crises.”
He also stressed the positive effects on confidence of signing healthcare reform into law and other domestic policies.
“The sense is that the country’s long-term problems – healthcare, energy, education, long-run fiscal deficits – are being addressed. All of that should increase a generalised sense of confidence and, too, will be a source of stimulus to the economy.”
Jobs growth could still be patchy and if that were the case, Mr Summers said the administration would act to foster higher growth and more job creation. – Copyright The Financial Times Limited 2010
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