Snow; Hiring to Increase as Orders Fatten
WASHINGTON (Reuters) - Treasury Secretary John Snow said on Tuesday that U.S. job prospects should soon pick up as steady economic growth fills corporate order books and forces some hiring.
"The economy is on a good recovery path," Snow said on CNBC television.
In response to questions, he said the lack of jobs so far in official government employment statistics was "puzzling" and may not reflect the growing number of self-employed Americans.
Some of it stemmed from a concentrated effort by companies to cut costs but, he suggested, there soon will be "diminishing returns" from that source that will lead to faster hiring.
"A strong recovery (like) we have now leads to order books filling up and as the order books fill up, then firms will return to hiring and expanding because by doing so they will improve their profitability."
In some sectors like financial services and health services generally, there already is "a nice job pickup" and that pace of job creation should increase in the second quarter, the Treasury chief said.
WARNS OF TRADE WAR
Echoing a criticism by President Bush (news - web sites) that Democrats might put a recovery at risk by restricting trade through fewer free-trade pacts or other measures, Snow warned that any such measures might invite retaliation.
"Any suggestion that we close our borders and return to economic isolationism would be a terrible mistake," he said. Asked about policy proposals by the near-certain Democratic presidential nominee, Sen. John Kerry (news - web sites), that might reduce trade, Snow said the impact would be to impede recovery.
"They'd be severely detrimental, they'd slow our growth prospects, they'd invite reciprocal actions on the part of other countries, would constrict the rate of growth and limit opportunities," Snow said.
On other issues, Snow said Europe needed to do more to spur growth within the region. "The euro zone is growing way too slowly. They've made some progress in adopting policies to remove impediments to growth but an awful lot more remains to be done," Snow said.
"Their slow growth is hurting our growth...and it's hurting the growth in the global economy," Snow said.
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