Geithner Expects U.S. Economy To Recover Faster And Stronger Than Other Advanced Economies

Bloomberg reports that U.S. Treasury Secretary, Timothy Geithner, predicted on Friday that the U.S. economy will rebound from the recession faster and stronger than other advance economies.

“We’re going to come out of this stronger than the other major economies and we’re going to come out more quickly,” said Geithner in Washington on Friday. He added that global growth is expected to be at 4% in 2010 and 2011 and the forecasts are going up. Geithner further said that the credit crisis and the collapse of Wall Street caused a huge amount of damage to basic confidence among businesses and families; however, he believes that the economy is healing and gradually strengthening across the board.

The U.S. economy lost fewer-than-expected jobs in February. The economy lost 36,000 jobs in February, even as the unemployment rate remained unchanged at 9.7%. Earlier on Friday, the Commerce Department released a report, which showed U.S. retail sales posted a surprise gain in February. This is the fourth time in the past five months that the U.S. retail sales data has been positive.

“We’re not going to make the mistakes that many other countries have made in the past, which is to, at the first signs of life and hope, step on the brakes and hope this thing will take care of itself,” Geithner said. “We think it’s important for the government in Washington to keep providing some reinforcement in targeted ways that can get investment going again, job creation more rapidly,” he added.

The Treasury Secretary also called on Congress to pass well designed legislation to support small businesses, increase lending and job creation. He also urged lawmakers to complete work on a financial regulatory overhaul bill. He said, “There is a very strong economic imperative, moral imperative and national security impetrative for U.S. to tighten its supervision of banks.”

Meanwhile, others in the Obama administration have also shown optimism on the economy’s prospects. White House economic adviser Lawrence Summers said, “We are, I believe, very close to the point where the job losses we have seen will give way to job growth,” in a speech yesterday in Huston, Texas.

Earlier in January, IMF had predicted that the U.S. economy would grow by 2.7% in 2010. The growth predictions for other advanced economies are at 2.7% for Canada 2.7%, 1.7% for Japan and 1.3% for U.K. The euro area is expected to grow by 1%. According to a median forecast of economists surveyed by Bloomberg last month, the U.S. will grow by 3% in 2010.
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