The US economy is recovering from the shock of last year’s banking collapse, but could continue to need financial assistance for an indefinite period into the future, the Treasury Department stated in a report released Monday.

The report (PDF), entitled “The Next Phase of Government Financial Stabilization and Rehabilitation Policies,” states that “although we are rolling back emergency support programs that are no longer needed, significant parts of the financial system remain impaired. Unanticipated events could intensify pressure on the financial system. In this context, it is prudent to maintain capacity to address unforeseen developments.”

The report said, as quoted by The Hill: “In those markets where conditions have improved, it is unclear whether the improvements achieved to date will persist without a period of continued government support.”

Given the usually subdued and diplomatic language used in government reports on the economy, such a declaration will likely be read by many economists as an indication that there could be trouble ahead for the economy.

Source/Full Story:: Raw Story

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