US 'set for more job losses'

John Snow: Good times are round the corner

US Treasury Secretary John Snow has said an economic rebound is on the way, but warned that more jobs may be lost before employers start hiring again.

Speaking at a conference in New York, Mr Snow said unemployment, which rose to a nine-year high of 6.1% last month, was "unacceptably high," and could keep rising in the month ahead.

"It could well rise to 6.2% or 6.3% before the higher growth rates begin to bring it down," he said.

The US jobless rate has risen sharply over the past year, with companies responding to a uncertain economic outlook by slashing their employee headcount.

While other economic data have been flat or mildly positive in recent months, the unemployment figures have been consistently downbeat, prompting talk of a "jobless recovery."

Better days

Rising unemployment is viewed with concern by the government, as it could hit consumer spending, which accounts for two thirds of economic activity in the US.

However, Mr Snow predicted that the jobs situation would improve in the second half of the year as economic growth picked up, helped by the controversial tax cuts that President Bush pushed through last month.

"I think we're going to see annualised growth rates near 3.5% by the later part of this year," he said.

"Bottom line is: I am confident we're going to see those 'Help Wanted' signs go up again in greater and greater numbers," Mr Snow said.

He added that other industrialised countries should do more to kick-start global economic growth.

"We expect others to take bold actions themselves - including fundamental structural reforms where necessary - to spur growth, create jobs, and contribute to global prosperity," Mr Snow said.