Geithner, in a speech tonight to the Economic Club of New York, also said he is encouraged by prospects for the U.S. economy even if “unemployment is very high, and is improving more gradually than any of us would like.”
“We still face a dangerous and uncertain world, as the rise in oil prices demonstrates,” Geithner said. “Americans are feeling the effects of higher gas prices. There is no quick and easy fix to this problem, but it reinforces the need for more progress to develop additional sources of energy of all forms.”
Geithner is joining the administration’s response to Republican critics who blame President Barack Obama for high energy costs. Obama has been focusing on energy in public appearances and speeches as rising gasoline prices threaten to impede the recovery.
Former House Speaker Newt Gingrich of Georgia promised in a Feb. 22 Republican debate that as president he would pursue an energy program including drilling in the Arctic National Wildlife Refuge so “every American can look forward to $2.50 per gallon gasoline.” Fellow candidate Mitt Romney said Obama “has tried to slow the growth of oil and gas production in this country, and coal production” in a March 1 speech in Fargo, North Dakota.
The national average retail price of unleaded regular gasoline in the U.S. climbed to $3.82 a gallon yesterday, the highest in 10 months, according to a daily survey by the American Automobile Association. Oil (CL1) in New York climbed above $110 a barrel on March 1 for the first time since May as escalating tension between Iran and the West threatened supplies.
So far, U.S. consumer confidence and spending have withstood the impact of higher gasoline prices. The Bloomberg Consumer Comfort Index rose to a four-year high in the week ended March 11, a report today showed. Retail sales advanced 1.1 percent in February, the most in five months, after a 0.6 percent rise in January that was larger than previously estimated.
Geithner said the U.S. faces “additional challenges, with Europe confronting a severe and protracted crisis and the world engaged in a struggle with Iran, which is adding to upward pressure on oil prices.”
The price of oil in New York fell as much as 1.6 percent today after Reuters reported that Obama and U.K. Prime Minister David Cameron agreed to cooperate on a release from stockpiles, including the U.S. Strategic Petroleum Reserve. Futures pared the decline after Jay Carney, the White House press secretary, said reports that the leaders reached any kind of agreement are “inaccurate.”
“While growth is gradually getting stronger, we still have very high levels of unemployment, poverty and other damage left over from the crisis,” Geithner said.
Initial claims for jobless benefits dropped last week to match a four-year low. Job growth in February capped the best six months since 2006, and the unemployment rate stayed at 8.3 percent, a three-year low.
U.S. stocks rose today, sending the Standard & Poor’s 500 Index above 1,400 for the first time since 2008.
Geithner said the broader challenges the U.S. faces “are more difficult in part because other nations -- China, Mexico and Brazil, for example -- are getting better at making market economies grow and develop.”
“Their success, though it brings considerable economic benefits to us, has put a lot of pressure on large parts of the American workforce engaged in making things that other countries are getting better at,” he said in New York.
Geithner reiterated the Obama administration’s push to revise the U.S. corporate tax system, which he called a “complex and unfair mess of subsidies.”
“We can’t offer Americans the illusion of tax cuts that pay for themselves,” Geithner said. “No responsible politician can offer the nation fiscal sustainability through trillions in unpaid-for tax cuts.”
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