Greenspan Cites Economic ‘Momentum’ in Jobs Creation

Alan Greenspan, the former chairman of the Federal Reserve and a self-described Republican libertarian, on Sunday reinforced increasingly confident assessments by the Obama administration that the nation’s latest job numbers reveal a resurgent economy.


“There is a momentum building up which is really just beginning, and it’s got a way to go,” Mr. Greenspan said on ABC’s “This Week” television program, when asked about Friday’s report that 162,000 jobs had been created in March.

Mr. Greenspan pointed out that corporate investment in new equipment “is coming back in a fairly substantial way” and that purchasing managers are building up product inventories for the first time in months.

“The momentum is very clearly there, and I doubt very much that we’re going to run out of that momentum until very late in the year,” he said, adding that the odds that the country would plunge anew into a recession have fallen significantly.

His remarks supported comments by Lawrence H. Summers and Christina D. Romer, administration officials who also appeared on the Sunday talk shows. Mr. Summers, the president’s top economic adviser, predicted “continued progress in job creation” and said the economy is “running somewhat ahead of what the administration was forecasting.”

“We’re in a very different place than we were a year ago,” he said about the jobs situation on “This Week.” “A year ago we were losing 600,000 jobs a month. Now the process of job creation has started. We expect that it will accelerate.”

He took pains to add that it was important to pump up consumer demand with measures that President Obama is pressing for, like increasing spending on construction projects and boosting the flow of credit to small business.

Mr. Summers had predicted in December that the economy would stop losing jobs by the spring. Despite the addition of the 162,000 jobs in March, 48,000 of which were temporary U.S. Census hires, the monthly payroll report also showed that the rate of unemployment had remained unchanged at 9.7 percent. Mr. Summers tried to account for this paradox, noting that “as conditions get better, more people decide to look for work and are counted in the labor force, so sometimes it’s frustrating and the progress doesn’t show up immediately in the unemployment rate.”

Mrs. Romer, chairwoman of the Council of Economics Advisers, agreed that the jobless figures may not turn around quickly.

Given the large number of new entrants into the nation’s labor pool, she said, the economy’s 3 percent growth rate may not be enough to make a strong dent in the unemployment rate.

Mr. Summers was asked about a delay, confirmed by the Treasury Department on Saturday, of a report to Congress on currencies and exchange rates in which some congressmen hoped the administration would label China a “currency manipulator.” Mr. Summers denied that the report was put off because the Obama administration wants China’s cooperation on sanctions against Iran. Rather, he said, the administration felt it would be prudent to wait until it had “taken stock of what kind of measurable progress we were able to generate” out of meetings with Chinese officials at three upcoming economic meetings.