Warren Buffett tells CNBC the U.S. economy has started to show signs of "real strength" in March and April, and it's not just companies replenishing their inventories.
Buffett says there's been an increase in manufacturing activity and some improvement in consumer demand as people regain confidence.
"We're glad we have inventory because it's been flying out the door."
He says Berkshire Hathaway is a "net hiring" right now, and that's happening because there is renewed demand for the products its subsidiaries make.
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But he notes that Berkshire's residential housing businesses are lagging, due to a hangover of demand in that market. He thinks that housing inventory will be gone within a year.
Buffett again warns that the U.S. government will need to reduce its enormous deficits and says the country faces potentially significant inflation in the years to come.
As for the national debt problems in Europe, Buffett says he doesn't know "how that will turn out" but it is an "interesting movie to watch."
Still, he says, "I don't like betting on the future purchasing power of any currency."
Buffett was interviewed live on Squawk Box by Becky Quick in a Burlington Northern dining car after this weekend's Berkshire Hathaway shareholders meeting drew over 40,000 people to Omaha.
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