Treasury Secretary Timothy Geithner said he believed the economy is “gradually getting stronger,” but said “we can’t tell yet” whether growth has stalled as it has in previous spring months during the Obama administration.
“We can’t tell yet,” Geithner said on “This Week” when asked if the same pattern from previous years was repeating, with strong growth in early months of the year, followed by a slow-down, as happened the last two years.
“But if you look back at what happened in 2010 and 2011, you’re right that you saw some early strength in the beginning of the year,” Geithner said. “But then what happened was, the crisis in Europe in 2010 and 2011 and then the crisis in Japan and then the oil shock caused growth to slow. And then in ’11, it was made worse by the – by all the political drama around the debt limit, which was very damaging to confidence.”
Geithner said the economy is still showing signs of improvement, despite the March jobs report showing just 120,000 new jobs created – far below predictions, and lower than the 200,000 + jobs created in the last three months.
“If you look at the evidence, the economy is getting stronger,” Geithner said, citing higher profits, increased productivity, and growing private investment. “We have a ways to go still, a lot of challenges still ahead. But the broad indicators are pretty encouraging They show an economy still growing.”
“We’d like it to be stronger and we’ve got a lot of work to do,” he added. “But it’s getting better.”
He acknowledged that not all Americans have felt that improvement, with a new ABC News/Washington poll last week showing that 76 percent of Americans still believe the country is in a recession.
“Well, it’s obviously still a very tough economy out there,” Geithner said. “And I think it’s not surprising, given the scale of the damage the crisis caused and how much damage you still see out there.”
Geithner said the continuing unemployment problem has limited individual income growth, as he pushed for more action by Congress to spur new job creation.
“Unemployment is still very high. And until that comes down, income growth is going to be very — very soft, very weak. That’s the tragic legacy of a crisis this bad,” Geithner said. “But, again, if you look at broad measures of the basic resilience and dynamism of the economy, they’re pretty encouraging. We’ve got to work to reinforce them.”
But Geithner said he does believe the unemployment rate will be lower on Election Day than it is today.
“If the economy keeps growing at a moderate pace, then, yes, the economy — more people will be back to work and you should see a gradual reduction in the unemployment rate,” Geithner said.
The treasury secretary disputed critics who said the economy would have improved more quickly if President Obama had made better decisions in his first year in office.
“If he’d had more support from his opponents in Congress, then we could have got more things passed that would have put more people back to work more quickly,” Geithner said.
Geithner, who does not plan to serve a second term if President Obama is re-elected, said the most important qualification for the next treasury secretary is having someone who can give unvarnished advice to the president on the economic challenges ahead.
“I think it’s very important that he has somebody who’s willing to tell him the truth and, you know, help him do the tough things you need to do in these — in these jobs,” Geithner said.