Barack Obama believes the US economy is starting to grow again, but the US president fears that new jobs will not be created until next year.
Jobless problems may linger until next year, says Obama
WASHINGTON // Barack Obama believes the US economy is starting to grow again, but the US president fears that new jobs will not be created until next year. As the global economy recovers from the worst crisis in 70 years, unemployment continues to spiral in the US, Europe and Japan. "I want to be clear, that 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 on CNN's State of the Union TV programme yesterday.
"And we're probably not going to start seeing enough job creation to deal with a rising population until some time next year," Mr Obama said, adding that 150,000 additional jobs must be added each month just to keep pace with population growth. Last week Ben Bernanke, the Federal Reserve chairman, said the worst US recession since the Great Depression of the 1930s was probably over but the recovery would be slow and it would take time to create new jobs.
In signs the US economy is recovering, retail sales climbed at the fastest pace in more than three years last month and a gauge of New York state manufacturing activity hit a nearly two-year high. Mr Obama has sought in recent weeks to highlight the signs of an improving economy in an effort to boost his popularity, which has suffered amid a heated debate over his plan to overhaul the nation's healthcare system.
In the CNN interview, he said he would leave it up to Mr Bernanke to pronounce whether the recession was officially over. But he felt the financial markets were working again and manufacturing had even picked up, in terms of production, last month. "So all the signs are that the economy's going to start growing again," he said. But unemployment figures tend to be the last to catch up in an economic recovery.
"The other problem is we lost so many jobs that making up for those that have already been lost is going to require really high growth rates," he said. Mr Obama is going to Pittsburgh this week to host the leaders of the Group of 20 (G20) developed and emerging economies. "That's part of what the G20 meeting in Pittsburgh is going to be about, making sure that there's a more balanced economy," he said.
"We can't go back to the era where the Chinese or the Germans or other countries just are selling everything to us, we're taking out a bunch of credit card debt or home equity loans, but we're not selling anything to them," he said. Mr Obama's top summit negotiator, the financial adviser Michael Froman, said that Washington would urge G20 leaders to resist the temptation to end stimulus efforts too early.
"Pittsburgh is not intended to be a victory lap," Mr Froman said. "We will be underscoring the need to remain vigilant, to avoid premature withdrawal of stimulus." * with Reuters and Agence France-Presse