Warren Buffett, whose Berkshire Hathaway Inc. posted its biggest profit since 2007 last year, said the U.S. economy is “getting better month by month,” aided by government stimulus and the strength of capitalism.
“The most important factor is the really underlying resilience of capitalism,” Buffett said today at a press conference in Bangalore. There are more than 300 million Americans “thinking about how to do something better tomorrow than they’ve done today.”
The U.S. economy expanded 2.8 percent last year, the most since 2005, after the Federal Reserve lowered interest rates to near zero. Joblessness in the U.S., the world’s largest economy, dropped to 8.9 percent in February from 9.8 percent in November.
“The U.S. economy has been improving fairly steadily, but not at a great rate” since mid-2009, Buffett said.
Berkshire reported $13 billion of 2010 profit on Feb. 26, and this month Buffett, 80, announced a $9 billion deal to buy engine-additive maker Lubrizol Corp. Last year, the billionaire completed the biggest takeover of his career, the $26.5 billion deal for railroad Burlington Northern Santa Fe, in what he called an “all-in-wager” on the U.S. economy.
The Standard & Poor’s 500 Index gained 3.2 percent this year through yesterday after climbing 13 percent in 2010 and 23 percent in 2009. The index is still about 14 percent below where it ended in 2007.
Buffett, who has a derivative bet that Japanese stocks will advance, said earlier this week that declines caused by the country’s worst earthquake on record are a “buying opportunity” for equity investors. The S&P 500 was little changed at 10:29 a.m. in New York.
The quake “will not stop the growth of the world’s economy,” Buffett said today. “It’s going to be important for Japan, obviously.”
Buffett canceled a trip to Japan after the earthquake and is now in India after visiting South Korea earlier this week. He is seeking opportunities for Berkshire in Asia and promoting the benefits of international commerce.
“Trade is essential to the world’s prosperity, and the more prosperous the rest of the world is, the better off it is for the United States,” he said. Buffett oversees more than 260,000 Berkshire employees in industries spanning energy, insurance, shipping and consumer goods. Berkshire units including Iscar Metalworking and Fruit of the Loom are among his businesses that manufacture products outside the U.S.