US recession fears fade

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The risk the United States economy will slip back into recession is lower now than at any time in the past year, Treasury Secretary Timothy Geithner says.

Geithner has dismissed concerns that rising US indebtedness might put pressure on the country's prized triple-A credit rating.

Credit ratings agency Moody's warned last week that anaemic US growth, on top of already stretched government finances, could put pressure on the triple-A status. Geithner said of a possible downgrade at the weekend: "That will never happen to this country."

The US economy expanded at an annual rate of nearly 6 per cent in the fourth quarter of 2009 and Geithner said it was definitely "healing" after the financial crisis that drove it into recession in late 2007. "This is going to take a while and it's going to be uneven," Geithner said.

He pointed to "encouraging signs" in Friday's report on US unemployment for January, which showed 20,000 more jobs lost but a dip in the unemployment rate to 9.7 per cent from 10 per cent in December.

He said the White House was doing everything it could to enhance recovery prospects and played down chances that growth might stall and push the United States back into recession. "I think we have much, much lower risk of that today than at any time over the last 12 months or so," Geithner said.

The US Treasury is heavily reliant on borrowed money to fund the government's day-to-day operations. Reuters

- Reuters