US treasury secretary Henry Paulson has said that February job losses were unwelcome but not surprising, and urged major financial institutions to raise capital to keep lending taps open during a difficult period. “Clearly these jobs numbers are not welcome, not good news,” he said. “But to me it wasn’t a surprise.” Many private-sector economists have said that recent gloomy data show that a recession is at hand and the question now is how deep it will be. Paulson has resisted a declaration that the US economy would fall into recession, saying instead that the Bush administration and Congress anticipated the current weakness by enacting a $152 billion economic stimulus plan designed to jolt the economy back to life. “This is a tough quarter, we know it. We did what we’ve done in anticipation of this,” he said.Paulson also reiterated his long-standing view that a strong dollar was in the United States’ interest. “Our economy, like any other has got its ups and downs. The long-term fundamentals are strong. And I’m confident they’ll be reflected in the currency market,” he said. He lauded the Fed’s actions to add $200 billion of new liquidity into the banking system by increasing term loan auction sizes and term repurchase transactions. The dollar has declined in value as the US economy has weakened under the strain of a housing crisis and financial market turmoil. Fed interest cuts too have reduced the dollar’s value against major currencies such as the euro and pound, helping to push up oil prices.
