US Treasury Publishes Economic Update

by Mike Godfrey, for LawAndTax-News.com, Washington

08 April 2008

Assistant Secretary of the United States Treasury, Phillip Swagel, late last week delivered the most recent economic update.

Commenting on the figures, he observed that this economic update highlighted both areas of weakness and strength within the American economy, and also gave the Treasury the opportunity to announce plans for future improvement.

On employment, the economic update revealed that payroll employment fell by 80,000 in March, following a decrease of 76,000 jobs in February. However, it was also revealed that the United States has added 8.0 million jobs since August 2003. Employment increased in 43 states and the District of Columbia over the year ending in February.

Overall, the unemployment rate rose to 5.1% in March from 4.8% in February. Unemployment rates declined or remained steady in 24 states over the year ending in February, the Treasury revealed.

There were also clear signs of strength within the economy, with exports growing and inflation decreasing.

Figures showed that strong global growth is boosting US exports, which grew by 8.4% over the past 4 quarters, while core inflation remains contained. The consumer price index excluding food and energy rose 2.3% over the 12 months ending in February.

Mr Swagel was also keen to point out that the Economic Stimulus Package will provide a temporary boost to the American economy:

"The package will help our economy weather the housing correction and other challenges. The Economic Stimulus Act of 2008, signed into law by President Bush has two main elements - temporary individual tax relief so that working Americans have more money to spend and temporary tax incentives for businesses to invest and grow. Together, the legislation will provide about USD150bn of tax relief for the economy in 2008, leading to the creation of over half a million additional jobs by the end of this year."

Mr Swagel concluded by suggesting that Pro-Growth Policies will enhance long-term US economic strength:

He explained that: "We are on track to make significant further progress on the deficit. The FY07 budget deficit was down to 1.2% of GDP, from 1.9% in FY06. Much of the improvement in the deficit reflects strong revenue growth, which in turn reflects strong economic growth."

"Looking ahead, higher spending on entitlement programs dominates the future fiscal situation; we must squarely face up to the challenge of reforming these programs."

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