RTTNews - Recent gross domestic product and unemployment figures point to a stabilizing U.S. economy, according to a senior Treasury Department official.
Alan Krueger, Treasury Chief Economist and Assistant Secretary for Economic Policy, told reporters Friday that the economic data points to positive signs.
Six months ago . the economy felt like it was in a free fall, Krueger said. This administration implemented a aggressive and comprehensive set of measures that put the brakes on the downturn. We are now seeing increasing signs that the economy is stabilizing.
However, he added, We are reminded by today's job numbers that a lot of work remains to be done.
New statistics showed Friday that only 247,000 jobs had been lost in July and that the unemployment rate ticked down slightly from 9.5 percent to 9.4 percent.
Krueger said the news, while better than in previous months, was still troubling.
They are an indicator of how long and brutal this recession has been, he said. We didn't get into these problems overnight and it's going to take a while to get out of them.
He added, There's no doubt, from looking at the statistics, that the recovery act and other policy actions helped to put the brakes on the downward spiral the economy was growing through.
There are also positive signs in the figures on companies using temporary workers, which Krueger said is often a leading indicator of the broader job market.
Companies often turn to temporary health employers when they are not sure whether things are improving [and] don't necessarily want to lock in to permanent expansion just yet, he said. This month, temporary help employment was minus 10,000, which is negative so that's not a good sign.
He added, On the other hand the temporary help industry was kind of going through a free fall and that looks like it's substantially moderating as well.
Krueger also noted as a point of concern the long-term unemployment figures, which show a record number of people having been out of work for more than 27 weeks.
The administration has taken a number of steps, Krueger said, to ease the burden for the unemployed, from extending benefits, excluding a portion of benefits from income tax liability and providing a tax credit to help the unemployed hold on to their health insurance.
However, with many long-term unemployed workers facing the prospect of their benefits coming to an end, Krueger would not commit to a further extension.
That is something that will be considered in due course, he said.
He did note, however, that some of the job-creating projects supported in the $787 billion economic stimulus and recovery act would likely begin coming on line in later parts of the year.
In terms of quarter by quarter I would say that we're going to see more support from the recovery act coming through the economy in the third quarter than the second quarter, he said. If you look at the predicted jobs impact of the recovery act, that is expected occur with a lag and that the largest jobs impact will happen in 2010.
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