Washington - President Barack Obama on Tuesday said the
government's efforts to revive the US economy were beginning to show
signs of progress, but warned 2009 would remain a tough year as the
US battles out of its worst recession in decades.
'By no means are we out of the woods just yet. But from where we
stand, for the very first time, we are beginning to see glimmers of
hope,' Obama said in a wide-ranging economic speech at Georgetown
University in Washington, picking up on the more upbeat tone he first
sounded last week.
Obama cited indicators that banks were freeing up lending and
homeowners were taking advantage of low mortgage rates to shore up
their finances. He defended the government's massive spending efforts
that critics argue are dangerously raising the federal deficit.
He touted the administration's unprecedented 787-billion-dollar
economic stimulus package as well as a collection of trillion-dollar
lending programmes by the Treasury and Federal Reserve to help revive
the banking sector, which is going through the worst financial crisis
since the Great Depression.
'Taken together, these actions are starting to generate signs of
economic progress,' Obama said, but warned that 2009 would 'continue
to be a difficult year.'
'The severity of this recession will cause more job loss, more
foreclosures, and more pain before it ends,' he said.
The US economy shrank 6.3 per cent in the last quarter of 2008 and
economists are bracing for a similar figure at the start of this
year. More than 5 million jobs have been lost since the start of the
recession in December 2007, the fastest pace since the end of World
War II.
But Federal Reserve Chairman Ben Bernanke offered a similarly
optimistic assessment earlier Tuesday in a speech in Atlanta,
Georgia, noting there were 'tentative signs that the sharp decline in
economic activity may be slowing.'
US stock markets have rallied more than 20 per cent in the past
month amid a series of better-than-expected indicators on the
economy, while a number of top US banks this week reported surprising
profits for the first quarter despite the continuing financial
crisis.
US officials are hoping the economy may pull out of recession by
the end of 2009.
But Obama also argued that the economic crisis made long-term
goals like reforming financial regulation, health care, energy and
education in the US all the more important to put the economy on a
firm footing.
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