Monday, September 21, 2009

Obama not yet prepared to declare recession over

(WASHINGTON) President Barack Obama isn't ready to close the book on the US recession.

'All the signs are that the economy's going to start growing again,' he said, citing improving manufacturing and financial markets. At the same time, he said he would 'leave it up to' Federal Reserve chairman Ben Bernanke to declare whether the recession is over.

Mr Obama said jobs are a challenge and said the United States will probably face high employment for some time. 'Probably the jobs picture is not going to improve considerably, and it could even get a little bit worse, over the next couple of months,' Mr Obama said yesterday in an interview on CNN's State of the Union programme. 'We lost so many jobs that making up for those that have already been lost is going to require really high growth rates.'

'We're probably not going to start seeing enough job creation to' keep pace with 'a rising population until some time next year', Mr Obama said. 'You need 150,000 additional jobs each month just to keep pace with' population growth.

The unemployment rate reached 9.7 per cent in August, a quarter-century high.

The Fed chief said on Sept 15 that the worst US slump since the 1930s has probably ended, while warning that growth may not be strong enough to quickly reduce the unemployment rate. 'Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time,' he added. The remarks were his most explicit statement that the contraction that began in December 2007 is over.

Mr Bernanke convenes the next meeting of Fed policy makers on Sept 22-23 in Washington.

Mr Obama's comments on the economy came as he launched a TV broadcast blitz to build public support for his top domestic priority, a remake of the US healthcare system whose fate now rests in the hands of a pivotal but deeply divided Senate committee. He became the first US president to appear on five Sunday network talk and public affairs shows in the same morning, an extraordinary effort to defend his healthcare overhaul which has come under intense attack from opposition Republicans.

The interviews with ABC, CBS, NBC, CNN and the Hispanic network Univision were taped on Friday at the White House.

Mr Obama also is visiting David Letterman today, the first appearance ever by a sitting president on the comedian's Late Show. The media push leads up to tomorrow, when members of the Senate Finance Committee plan to start voting on their version of a healthcare reform bill.

Democrats on the committee are disappointed with the bill proposed by the chairman, Senator Max Baucus of Montana. Republicans see a chance to deliver a stunning blow to Mr Obama that could cripple his presidency.

The 23-member committee is a microcosm of the Senate, the narrow gate through which legislation to cover the nearly 50 million uninsured Americans and try to control medical costs has to pass. If the committee can't produce, then the ability of Mr Obama and the Democrats to pass a bill this year will be in serious question. -- AP, Bloomberg

Source: Business Times, 21 Sep 2009

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