US economy on track to recovery

WASHINGTON, D.C.: A comprehensive recovery strategy by US President Barack Obama’s administration has steered the world’s largest economy from the brink of collapse, his economic pointman said Thursday.

Treasury Secretary Timothy Geithner said, “We’ve traveled a long way from January. Back then, across the country for the first time in many of our lives, our economy was on the verge of collapse.”

“Today, because of a comprehensive strategy enacted by President Obama. We are back from the brink,” he said in a speech in Ohio, among states reeling from recession since December 2007.

Geithner said the pace of economic decline and job loss had slowed while banks that borrowed taxpayer funds to avert collapse were starting to pay the government back.

Credit markets were also starting to unfreeze and the housing market—epicenter of the financial crisis that drove the economy to near-collapse—was starting to stabilize, he said.

“And, overall, widespread fear is giving way to emerging confidence.”

Long way to go

But Geithner cautioned of the long road ahead to restore sustained economic growth.

“We have a long way to go, but we are starting to see signs of stability, and these signs mark the first steps to recovery,” he said.

Referring to the recovery in Ohio in particular, he said in January the state was losing jobs at a rate of 100,000 a month but by last month, the rate had “slowed sharply” to 30,000.

“That’s 30,000 too many, and unemployment is still to high,” he added.

China’s economy

From Beijing, Agence France-Presse also reported that half of the 24 million people on China’s official unemployment rolls may not find jobs this year even if the country posts 8-percent economic growth.

The estimate given by the Labor Ministry does not take into account millions of recent university graduates and migrant workers, meaning the actual number of jobless could be much higher.

“Even if economic growth reaches 8 percent, it could create a total of only about 12 million new jobs for the full year,” Yin Weimin, minister of human resources and social security, said in a statement.

“The gap between [job] demand and supply will be further enlarged from 2008,” Yin said, without giving a figure for last year.

China’s economy grew by 6.1 percent in the first quarter, and 7.9 percent in the second, but the government said it needed at least 8-percent growth to keep unemployment at bay and thereby prevent social unrest.

The government has pledged to create nine million new jobs this year and keep the urban registered unemployment rate below 4.6 percent.

The rate stood at 4.3 percent in the second quarter, unchanged from the first three months of the year and up from 4.2 percent at the end of 2008, government data showed.

Earlier this year, a Labor Ministry official described the jobs situation in China, the world’s third largest economy, as “grave,” noting that four million migrants and three million graduates were without work.

Some critics have argued that Beijing’s $585-billion economic stimulus, unveiled in November, did not give sufficient support to the labor-intensive sectors and firms that create most jobs.

They said that much of the package instead focused on large infrastructure projects that bring in quick nominal growth in terms of gross domestic product (GDP). GDP is the total cost of all goods and services produced in a country in a year.  –AFP