NEW YORK Surging oil prices are not positive
for the economy, although the job market is "very strong," U.S.
Treasury Secretary Henry Paulson said in a radio interview on
Crude oil prices have climbed 51 percent so far this year
and hit a record high above $90 a barrel on Friday, with winter
not too far away.
"It's not a positive for the economy," Paulson said on WABC
However, he also described the U.S. economy as "very
healthy" in the context of "very strong" global economic
growth, despite continuing weakness in the housing sector and
difficult lending conditions.
A report on Wednesday showed sales of previously owned
homes fell to the lowest since records began being kept in
1999, which economists saw as evidence a downturn in the
housing market is accelerating.
"This economy is holding up very well against those
challenges," Paulson said.
In particular, the former investment banker pointed to the
resilient labor market as an example of how the broader economy
is managing to weather the storm in credit markets.
"The employment situation is very strong in this country,
there is no doubt about that," he said. Those remarks could be
soothing to investors looking ahead to next week's September
U.S. non-farm payrolls report.
Economists polled by Reuters have a median expectation for
growth of 85,000 new jobs, after 110,000 people were added to
payrolls in August.