Geithner Says U.S. Unemployment May Rise Again Before Declining
Treasury Secretary Timothy F. Geithner said U.S. unemployment may rise again before it falls and the economy isn’t recovering rapidly enough.
“It’s possible you’re going to have a couple months where it goes up,” he said on ABC’s “Good Morning America” program. “People start to come back into the labor force, and that can cause the measured unemployment rate to go up temporarily.”
The U.S. economy grew at a slower-than-expected 2.4 percent pace in the second quarter as consumer spending slowed, according to Commerce Department data. Companies probably added about 90,000 jobs in July, according to the median estimate in a Bloomberg News survey before the Labor Department’s Aug. 6 employment report. The jobless rate is forecast to rise to 9.6 percent from 9.5 percent.
Geithner said he expects the economy to heal gradually and “we want to do what we can to reinforce that process because it’s not coming back as quickly as we like.”
The Treasury secretary reiterated the Obama administration’s position that tax cuts passed under former President George W. Bush shouldn’t be extended for the wealthiest Americans.
“We’re proposing to extend tax cuts that go to more than 95 percent of working Americans, more than 95 percent of small businesses across the country,” Geithner said in the interview, taped yesterday in New York. To make them fiscally responsible, “we also think it makes sense to let those tax cuts that only go to 2 percent of the highest-earning Americans in the country expire as scheduled” at the end of the year.
President Barack Obama and congressional Democrats want to extend them for households earning up to $250,000 and let them end for wealthier taxpayers. Republicans insist on keeping the tax cuts for all income levels without reducing spending or raising taxes elsewhere.