The US economy is showing “glimmers of hope” despite continuing stresses, President Barack Obama said today as he signalled more steps to improve the business climate.
He made his comments to reporters after a meeting at the White House with members of his economic team, including Treasury Secretary Timothy Geithner, economic adviser Larry Summers and Federal Reserve chairman Ben Bernanke.
“What we’re starting to see is glimmers of hope across the economy,” he said, although he also noted that the economy is “still under severe stress”.
“Whatever we do ultimately has to translate into economic growth and jobs.”
Mr Obama said there had been a significant rise in the number of homeowners seeking to refinance their mortgages, which will put money back into their pockets.
He said a 20% increase last month in the Small Business Administration’s largest programme means that small companies, often prized as the backbone of the economy, “are starting to get money”.
But he also pointed to the high rate of joblessness – which climbed to a 25-year high of 8.5% in March – and acknowledged that “we’ve still got a lot of work to do”.
“We’re starting to see progress,” he declared, “and if we stick with it, if we don’t flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track.”
Mr Obama said he and his advisers discussed the stability of the financial system, the housing market and a programme to help banks clear their books of bad assets which have made normal lending difficult, if not impossible.
Also at the meeting were Christina Romer, who heads the White House Council of Economic Advisers; Sheila Bair, chairwoman of the Federal Deposit Insurance Corp; Securities and Exchange Commission chairwoman Mary Schapiro; and Comptroller of the Currency John Dugan.
Today’s meeting was the president’s first with his economic team since his return this week from an overseas trip partly focused on the global economic slump, including the G20 summit in London.
The backdrop for today’s White House meeting was the still-fragile economy which has begun to show hints of a possible recovery, including a strong profit forecast from Wells Fargo & Co, a drop in claims for unemployment benefits and predictions of solid April sales from several retailers.
Also promising were less-jittery stock investors, shoppers and homebuyers, slowly thawing credit markets which were once frozen and stabilising economic indicators that had been going from bad to worse.
All that has at least one adviser sounding cautiously optimistic.
“There has been a substantial anecdotal flow over the last six to eight weeks of things that felt a little bit better,” said Mr Summers, director of Mr Obama’s National Economic Council, in a speech.
“The sense of a ball falling off a table, which is what the economy has felt like since the middle of last fall, I think we can be reasonably confident that that is going to end within the next few months, and we will no longer have that sense of a free-fall.”
But Mr Summers, who spoke at the Economic Club of Washington, said it was too soon to forecast how strong the rebound would be and when it would take hold. He also refused to predict how high the unemployment rate will rise before a sustainable recovery begins.