US officials bullish about growth

Treasury secretary Geithner and adviser Summers predict upturn in coming months.

    The commerce department showed a contraction of 1.0 per cent - better than expected [EPA]

    Summers told NBC television: "A very great likelihood - and this is what most professional forecasters say - is that we'll see growth going forward in the second half of this year."

    The two men were seconded by Alan Greenspan, the former chairman of the Federal Reserve, who told ABC the worst US financial crisis in a half a century was "not quite" over, "but we're getting there".

    'Pretty sure'

    Greenspan said he was "pretty sure" the broader US economy had hit bottom and begun to turn around in mid-July.

    Summers pointed to the success of a "cash for clunkers" programme where motorists can trade-in old vehicles for a government payment against a new one as a sign that the US car industry was coming back to life.

    He said industries will have to replace inventories that have been massively cut.

    But both he and Geithner acknowledged that the US jobless rate would continue to climb from its current level of 9.5 per cent.

    Geithner cited private analysts as saying the rate will not start coming down until the beginning of the second half of 2010.

    Gross domestic product figures released on Friday by the commerce department estimated that the US economy contracted 1.0  per cent in the second quarter, better than forecasters expected.

    The administration said the new report showed the economy was in  deeper trouble than believed when Obama took office but that its recovery programmes were working.

    SOURCE: Agencies


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