Treasury secretary sees faster growth helping government finances
WASHINGTON (Reuters) - The Obama administration is increasingly confident the U.S. economy is turning a corner and that this will help government finances, Treasury Secretary Jack Lew said on Thursday.
"What we're seeing in all the economic indicators is that the trajectory of growth is rising," Lew said in an interview with CNBC from Davos, Switzerland.
His view echoes the broad sentiment among private sector economists that the U.S. economy is poised for its fastest year of growth since 2005. An improving economy should help the government take in more tax revenue this year.
"Certainly projections suggest that," Lew said.
Faster economic growth combined with tax hikes and spending cuts to nearly half the federal budget deficit in the last fiscal year, which ended in September.
Part of the optimism over this year's economic growth prospects comes from the government engaging in much less austerity in 2014, easing a big brake on the economy.
Economists surveyed by Reuters expect gross domestic product, which is the sum of all goods and services produced by the country, to grow by 2.9 percent this year, the fastest pace since 2005.
There have been reasons for caution. Namely, the Labor Department said earlier this month that job creation slowed sharply in December, although many private economists believe a cold snap was weighing on the economy temporarily.
Lew also appeared undaunted by the report.
"It's kind of an outlier," he said.
(Reporting by Jason Lange; Editing by Chizu Nomiyama)