Moderate growth foreseen for U.S. economy
WASHINGTON (AP) — U.S. Treasury Secretary Henry Paulson says the $168 billion government stimulus effort has proven to be a timely support for the U.S. economy and will continue to assist growth in the second half of this year.
Paulson predicted in a speech Thursday the economy will continue growing moderately the rest of this year even though the country faces major problems from the housing slump.
Paulson said we are making progress although not in a straight line. He added that housing continues to be at the heart of our economic challenges and remains our most significant downside risk.
Paulson said the economy needs to work through adjustments in housing and credit markets, for the country to return to stronger growth next year and beyond.
Paulson spoke on a day the government released a report showing that the housing and credit crises continued to weigh on the economy. The gross domestic product expanded at an annual rate of 1.9 percent in the April-June quarter, double the 0.9 percent increase in the first three months of the year.
The government estimated that the economy shrank in the final three months of last year, however, at an annual rate of 0.2 percent. It’s the first time GDP has declined since the 2001 recession.
Checks sent out to millions of U.S. households earlier this year to stimulate the economy have helped, though, Paulson said.
