Figures for the US GDP in the second quarter of the year will probably improve “a lot” from the first quarter, White House budget director Peter Orszag said on Sunday.
“The second quarter GDP numbers, even though they’re likely to still show a decline, are likely to look a lot better than the first quarter, which is a sign of progress,” he told CNN’s State of the Union.
The US Treasury will published figures for second quarter economic activity on July 31.
Figures published by the US Commerce Department said last quarter’s GDP shrank at an annual rate of 5.5 percent, which was still an improvement from the previous quarter’s decline at an annualized rate of 6.3 percent.
Orzsag said on Sunday that the improvement in the first quarter of the year was a positive sign.
“We’ve stepped back from that precipice, but we’re not yet in the growth zone,” he said. “Most private sector forecasters are suggesting that won’t happen until later this year.”
The US Federal Reserve said in minutes released from its last meeting that it has revised its forecast for growth.
The central bank now expects the decline in economic activity to be between one and 1.5 percent for this year from a previous estimate of a two percent rate of decline for the year.
But Orzsag acknowledged that positive economic activity figures would not necessarily matched improved unemployment numbers.
“Firms usually, even after the economy starts to pick up again ... remain reluctant to hire people for some period of time,” Orzsag said.
“So the unemployment rate is going to remain elevated — too elevated — and there are too many people who are suffering, for some period of time,” he said.