Treasury Secretary Timothy F. Geithner said excessive borrowing by banks and investment in real estate leading up to the recession make the U.S. economic recovery slow and difficult.
“You had this huge growth in leverage in the financial system, huge overinvestment in real estate in parts of the country, and those things made the crisis much more acute. But more relevant for us now, they make the recovery harder,” Geithner said at a U.S. Hispanic Chamber of Commerce conference in Dallas today. “They make it slower, longer, more uneven, and that’s the challenge we’re dealing with today.”
Parts of the economy, including exports and private investment, are “really quite strong” even if “it is a very tough economy still,” Geithner said.
Orders for U.S. capital equipment rebounded in August, signaling a slowdown in business investment may be less severe than some economists projected. Bookings for goods such as computers and communications gear climbed 4.1 percent after a 5.3 percent decline in July that was smaller than previously estimated, figures from the Commerce Department showed today in Washington.
Total orders dropped 1.3 percent, depressed by volatile demand for aircraft, and bookings excluding transportation equipment rose more than forecast.
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