Washington President Barack Obama declared Friday that the slumping economy has begun to show “glimmers of hope,” but cautioned that it remains severely stressed and will require lots more work to turn it around.
Once criticized for talking too pessimistically about the economy, Obama is highlighting the positive.
“We’re starting to see glimmers of hope across the economy,” the president said after a White House meeting with his economic team, including Treasury Secretary Timothy Geithner and top economic adviser Larry Summers. Federal Reserve Chairman Ben Bernanke also participated in the session.
Obama echoed Summers’ prediction a day earlier that the “sense of a ball falling off a table” would end in a few months.
The president highlighted signs of thawing in the credit markets, particularly for small businesses seeking loans, along with tax cuts he said workers will soon see in their paychecks and a jump in mortgage refinancings because of historically low interest rates.
Obama said those positive moves as well as infrastructure work and other spending underwritten by his $787 billion stimulus program all point to welcome signs of long-anticipated economic improvement.
“We’re starting to see progress,” Obama said. “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.”
The president threw in a dose of sober reality, too.
“Now, we have always been very cautious about prognosticating and that’s not going to change just because it’s Easter,” Obama said. “The economy is still under severe stress.”
Unemployment hit a 25-year high of 8.5 percent in March, and many people are still losing their homes or jobs, or fear losing them.
“So we’ve still got a lot of work to do,” Obama said. Without elaborating, he said the administration would take steps in the coming weeks to help further improve the business climate.
Gauging Wall Street’s response to Obama’s more upbeat take had to wait as the markets were closed for Good Friday.
Friday’s meeting was the first between Obama and his economic team since he returned from an overseas trip partly focused on the global economic crisis. He participated in a meeting last week in London of leaders from the 20 wealthiest and developing economies.
Also at Friday’s meeting were Christina Romer, head of the 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.
Recent economic statistics have hinted at signs of recovery from the recession that began in late 2007, including evidence that stock market investors, shoppers and homebuyers are less nervous than before. Wells Fargo & Co. issued a strong profit forecast this week, the government saw a drop in claims for unemployment benefits and several retailers predicted solid sales for April.
Once criticized for too much sour economy talk — Obama often told an anxious public that the situation would get much worse before it got better — he has begun to highlight the positive.
On Thursday, he urged eligible homeowners to refinance their mortgages using a special government program. He sat with a group of homeowners who had shaved hundreds of dollars from their monthly bills because of low interest rates.
“We are at a time where people can really take advantage of this,” Obama said.
His top economic adviser sounded a note of cautious optimism, as well.
“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,” Summers said Thursday at the Economic Club of Washington.
However, he 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 unemployment will rise before a sustainable recovery begins.