October 26, 2007 / 2:59 PM / 10 years ago

Treasury's Paulson: high oil not good for economy

<p>U.S. Treasury Secretary Henry Paulson delivers a speech to the Georgetown University Law Center on "Homeownership, Mortgage Markets and the U.S. Economy" in Washington October 16, 2007. Surging oil prices are not positive for the economy, although the job market is "very strong," Paulson said in a radio interview on Friday.Hyungwon Kang</p>

NEW YORK (Reuters) - 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 Friday.

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 radio.

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.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below