WASHINGTON — Treasury Secretary Timothy Geithner Wednesday warned that should the headwinds from oil prices, Iran, or the Euro zone crisis cause a slowdown in the recovery, U.S. economic activity will not expand at the rate needed to make substantial dents in the jobless rate.
Right now, however, “the U.S. economy is gradually healing, gradually getting stronger,” Geithner said during a moderated discussion at the Brookings Institution, adding that though there are a lot of headwinds, such as the crisis in Europe and high oil prices, “we are making quite a bit of progress.”
In its World Economic Outlook Tuesday, the International Monetary Fund revised up U.S. growth by 0.3 to 2.1% in 2012 and by 0.2 to 2.4% next year.
Geithner said growth would need to be at a rate far above 2.25% to 2.5% for the unemployment rate to decline at a more significant pace.
If oil prices, Iran tensions or Europe’s struggles conspire to slow the momentum of the U.S. economic recovery, then U.S. growth “will be at the weak end of that range,” Geithner predicted.