By Randy Foreman, White House Correspondent
WASHINGTON – (NewsBlaze) The White House on Monday attempted to make a case to reporters of stability in the US Economy in the face of a historic 1,000 point drop on Wall Street. The average did recover to about a 156 point drop before closing the day nearly 600 points down.
This is close to 10% lower than the recent high. This is part of a global selloff, as investors appear to worry about events in China. Many currencies also fell today.
“I would encourage people to evaluate the ongoing strength and resilience of the U.S. economy. U.S. businesses over the last 65 consecutive months have added 13 million jobs – that’s the longest sustained private-sector job growth streak in American history. The unemployment rate here in the United States is at 5.3 percent, which is the lowest level in seven years,” noted White House Press Secretary Josh Earnest.
Earnest was queried by Jonathan Karl of ABC News, later on in the White House’s Daily Press briefing, about the fundamentals of the economy being strong. The Administration spun the answer by noting their legislation reforming Wall Street.
“One way that I would measure that is to take a look at the impact of Wall Street reform legislation; that now, we know that U.S. banks have reduced their leverage and have added more than $600 billion in capital since 2009. Some of that has related to new requirements under Wall Street reform. That means that banks are less reliant on unstable, short-term funding, and that they’re better able to withstand short-term volatility within the financial markets.”
“One of the things that has been a part of Wall Street reform is annual stress tests, and that’s another reason that we can have more confidence in the strength and resilience of the U.S. economy.”
One other component that weighed on reporters’ minds, such as Reuters White House Correspondent Jeff Mason, was the prospect of the Fed raising interest rates. Earnest maintained a traditionally cautious response about speculating about market moves.
“I wouldn’t want to speculate on a decision that ultimately is the responsibility of the independent Federal Reserve. But I’m sure the Federal Reserve would tell you that they obviously are paying close attention to this volatility and broader economic movements. But any sort of conclusions they reach will be theirs, and I wouldn’t speculate on them.”
The specter of Chinese market moves also surfaced with reporters as well. The White House informed reporters that the Treasury Department was monitoring Chinese markets and made a push for market reform.
“You’ve also seen readouts that have been issued by the Treasury Department of conversations that Secretary Lew has had with senior Chinese officials in the last couple of weeks. Most of those conversations, however, have focused on the recent shift in the Chinese exchange rate regime and its economic reform agenda. And this is consistent with the case that we have long made to China that they should continue to pursue financial reform to increase exchange rate flexibility and to move rapidly toward a more market-determined exchange rate system. And so that is a case that we have continued to impress upon the Chinese as being a priority of the United States,” Earnest said.