Geithner sees gradual improvement in hiring
By Ben Rooney, staff reporterFebruary 9, 2011: 10:33 AM ET
NEW YORK (CNNMoney) — Treasury Secretary Tim Geithner offered an optimistic outlook for the economy Wednesday, although he acknowledged that the job market will take time to recover.
Speaking at a town hall meeting in Washington, Geithner told a group of college students that they can expect “a stronger economy with more opportunity” when they graduate next year.
Still, the improving economy and growing demand for goods and services, particularly in developing countries, should lead to more hiring in the United States, according to Geithner.
“As demand grows, businesses will have to bring more people back to work,” he said. “That process is happening now, we just want it to accelerate.”
The Labor Department said last week that employers added 36,000 jobs in January, falling far short of economists’ expectations. Meanwhile, the unemployment rate unexpectedly eased to 9%from 9.4% the month before.
Geithner said the drop in unemployment “probably overstates” the strength in the job market, while the smaller-than-expected rise in payrolls “understates” the improving trend in hiring.
In response to a question about the deficit, Geithner said bringing down the nation’s long-term debt is necessary for future economic growth. But he stressed that government should continue to invest in areas such as education and infrastructure to ensure America’s competitiveness.
The challenge for policymakers, he said, is to “make sure we spend taxpayer resources more wisely, but do it in a way that brings down deficits.”
This is a “fundamentally manageable issue for our country,” he added.
Geithner said he was encouraged by the recent “spirit of cooperation” in Washington, citing the tax cut deal Congress passed late last year.
He said President Obama’s budget proposal, due next week, will be “growth friendly” and “good for the middle class.”
The Treasury Secretary was also asked about reforming the corporate tax code, which businesses say is cumbersome and hurts economic growth.
Geithner said reforms should be “revenue neutral,” but he stopped short of endorsing a tax holiday on the income businesses derive overseas.
“We’re not going to ask Americans to pay higher taxes so we can lower taxes on businesses,” he said.