Data continue to show the country's severe recession is inflicting severe pain, with over 5 million jobs lost since it began in late 2007. But there have been scattered indications that the pace of economic decline is slowing. -- PHOTO: AFP
WASHINGTON - PRESIDENT Barack Obama said on Sunday that the US economy remained under strain and his top economic adviser tempered hopes for a speedy recovery that have driven the stock market to successive gains.
'We're not out of the woods. This is still a difficult time for the economy. Credit is still contracted,' Mr Obama told a news conference in Port of Spain, Trinidad and Tobago, where he was attending the Fifth Summit of the Americas.
TALKING UP RECOVERY
A SUCCESSION of public officials have voiced confidence that the economy was turning the corner in recent days. Summers said there was nothing wrong in talking about the recovery ahead, but emphasized the economy still faces challenges.
'No one is in any position to declare any kind of victory here. But the fact that no one can declare victory doesn't mean we shouldn't take note of developments as they unfold.' 'There are still substantial risks ... there are downside contingencies that we have got to prepare for,' Summers said.
Data continue to show the country's severe recession is inflicting severe pain, with over 5 million jobs lost since it began in late 2007. But there have been scattered indications that the pace of economic decline is slowing.
Global stocks closed on Friday higher for a sixth straight week and oil prices rose above US$50 (S$75) a barrel on the upbeat mood of consumers and improved quarterly earnings reported by some of the country's biggest banks.
'We've seen some more mixed statistics after a period when there was no positive statistics to be found,' White House Director of the National Economic Council Lawrence Summers told NBC's 'Meet the Press.' 'But it is a long road and it is going to take time. It is going to take creating jobs again ... it is going to take supporting the financial system,' he said.
A key challenge for the US economy is to restore confidence that its banks are now sufficiently capitalised after huge losses from the collapse of the housing market.
Mr Obama's economic team is conducting stress tests of the top 19 U.S. firms and will issue guidelines on the process on April 24, with results due on May 4.
Mr Obama said the tests would show that some firms need more help than others.
'Different banks are in different situations. They're going to need different levels of assistance from taxpayers,' Obama said, and he vowed that taxpayer money would not be wasted.
'We try to use as light a touch as we can. But I am not going to simply put taxpayer money into a black hole, where you are not going to see results,' he said. -- REUTERS
