New York, Mar 16 (IANS): US economy is on the mend and shows many signs of early recovery but still not strong enough to go without help from the government, said US Treasury Secretary Timothy Geithner Thursday.

In a speech before the economic club of New York, Timothy Geithner said the economy as a whole is more productive than before the crisis thanks to the early and forceful action by the Obama administration to stimulus the economy, reported Xinhua.

However, Geithner said the economy still faces some "very tough challenges" including high unemployment, weak housing market, rising oil prices, devalued household saving and very high rates of poverty.

Meanwhile, the confidence is extremely fragile, said Geithner.

"That is why it is so important that policy makers continue to work to get the economy growing faster in the short term and not shift prematurely to fiscal restraint.

"For these reasons, we believe there is a compelling need for additional action by Congress to strengthen growth and get more Americans back to work," he said.

Furthermore, the government needs to combine investments with reforms in education to support innovation, encourage investment and expand exports to build a better foundation for future growth, he added.

Geithner stressed the importance to restore fiscal sustainability in the long run, but he also warned that policy makers should remember the fiscal realities when considering the strength of spending cut.

"We can't cut our way to growth and severe austerity now would be very damaging," he said.