Treasury Secretary Timothy Geithner: Unemployment Could Go Up Before It Comes Down

by
August 3, 2010

By KATE McCARTHY and RICH McHUGH, ABC News

Treasury Secretary Timothy Geithner acknowledged that it is still a “tough economy” for most Americans, and warned it’s possible the unemployment rate will go up for a couple of months before it comes down as more people enter the labor force.

“When they see a little hope that there may be jobs out there, they start to come back in again. And that can cause the measured unemployment rate to go up — temporarily,” Geithner told “Good Morning America’s“ George Stephanopoulos in an exclusive interview. “But what we expect to see, and I think most forecasters expect this…is an economy that’s gradually healing, gradually strengthening, businesses starting to add people back.”

The economy is not rebounding as quickly as Geithner and the Obama administration would like, he said. Last week’s economic report card showed the Gross Domestic Product grew at a rate of 2.4 percent, slower than it had earlier this year. But amid that bad news, Geithner said, were signs of growth in the private sector.

“If you look at the numbers last week that tell you what’s happening to the economy as a whole, what they showed is the private sector is getting stronger. So if you’d add together business investment and consumption, that part of the economy, which is what matters for the future, is getting progressively stronger and that’s very important,” Geithner said.

Many opponents say President Obama’s unwillingness to extend all of the Bush era tax cuts, including to the top earners, will only increase the unemployment rate.

To read more, visit: http://abcnews.go.com/GMA/treasury-secretary-timothy-geithner-unemployment/story?id=11308157

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