Greenspan And Summers Optimistic About U.S. Economy

Bloomberg reports that Lawrence Summers, the White House economic adviser, believes that the U.S. economy has started to gain momentum and companies will start hiring at top pace in the coming months as the economy continues to show signs of recovery after the worst recession since 1930.

In an interview with ABC’s “The week” program, Summers, director of President Barack Obama’s National Economic council, said, “Now the process of job creation has started, we expect it will accelerate.” Former Federal Reserve Chairman Alan Greenspan too echoed an optimistic feeling on the ABC program when he said that companies have started to gain confidence and have started to invest in new equipments. The job market has too improved considerably, as the payrolls increased by 162,000 last month, the most in last three years. He said that, “There is a momentum building up which is really just the beginning, and it’s got a way to go,” he further added that spending on “equipment is coming back in a fairly substantial way, there’s a shortage of inventories out there and we’re on the edge of a significant build-up.” The chances that the economy will retrench after recovering from the recession “have fallen very significantly in the last two months,” Greenspan added.

As the U.S. Labor Department reported last week that employment grew in March, the most in last three years, President Obama in order to further improve the job market sentiment has urged additional spending on the construction projects and to provide a boost to small businesses by increasing credit to them. According to Labor Department, the month of March saw highest gain in the number of payrolls since March 2007. Among those who are hiring are manufacturers, health-care companies, temporary-help service providers and warehouses.

According to Christina Romer, President Obama’s chief economist, the economic stimulus legislation has helped the U.S. economy to recover from the recession. In a NBC program, ‘Meet the press,’ she said, “It has absolutely supported unemployed workers, it has absolutely helped state and local governments.” Meanwhile, the employment numbers at government agencies increased by 39,000 workers. However, there are still few problems in the job market. As the data from Labor Department shows that average earning per hour decreased last month and the number of people taking part time jobs increased because they could not get full time jobs. The underemployment rate, which includes people with part –time jobs and people who want to work but have given up as they do not find work, increased from 16.8% to 16.9%.