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Obama says it will take many months for US recession to recover

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President Barack Obama
President Barack Obama

President Barack Obama said it will take “many more months” for the U.S. to fully recover from the recession as employers continue to eliminate jobs.

The president said in his weekly address on the radio and the Internet that yesterday’s government report on the gross domestic product showed the recession was “even deeper than anyone thought” when he took office in January. The stimulus legislation passed by Congress in February and measures to stem home foreclosures have helped stem the slide, he said.

“Important steps that we have taken over the last six months have helped put the brakes on this recession,” Obama said. “But history shows that you need to have economic growth before you have job growth.”

Obama is putting the economy back at the forefront of his remarks to the public as polls show it remains the top concern of Americans. Next week he’s heading to Elkhart, Indiana, for an event focused on his economic policies. Obama said earlier this week that the U.S. “may be seeing the beginning of the end of the recession.”

The Commerce Department reported yesterday that the gross domestic product shrank at a 1 percent annual pace in the second quarter, less than forecast, after a 6.4 percent drop in the first three months of the year. The economy has lost 6.5 million jobs since the recession began in December 2007, and economists surveyed by Bloomberg this month forecast the jobless rate will exceed 10 percent by early 2010. The Labor Department is scheduled to release the July unemployment rate Aug. 7. The June rate was 9.5 percent.

Jobs and Recovery

“As far as I’m concerned, we will not have a recovery as long as we keep losing jobs,” Obama said. “And I won’t rest until every American who wants a job can find one.”

The GDP report is a “an important sign that we’re headed in the right direction” as business investment stabilizes, which may lead to more hiring.

“That’s when it will really feel like a recovery to the American people,” he said.

The revised government data showed that GDP has tumbled 3.9 percent since the second quarter of last year — the biggest drop since quarterly records began in 1947. GDP has fallen four straight quarters, the longest ever.

“I know that there are countless families and businesses struggling to just hang on until this storm passes,” Obama said. “But I also know that if we do the things we know we must, this storm will pass. And it will yield to a brighter day.”

In a July 24-28 poll by the New York Times and CBS News, 36 percent of Americans said the economy was the most important problem facing the country. Twelve percent cited health care.

Republican Address

In the Republican address, South Dakota Senator John Thune said the party is committed to an overhaul of the U.S. health- care system while criticizing Democratic proposals for being “government-run” and too expensive.

“The Democrats who control Congress have been spending money and racking up debt at an unprecedented pace,” Thune said. “Their plan for government-run health care would only make things worse.”

Thune said the proposals being considered in the House and Senate would cost more than $2 trillion. The Congressional Budget Offices has estimated the Congressional proposals will cost around $1 trillion.

The Republican alternative, Thune said, would let small businesses join together to buy health insurance plans for their employees, protect hospitals and doctors from lawsuits and extend tax benefits to people who don’t get insurance through their jobs.

“These and other commonsense solutions would provide real reform for our health-care system rather than the dangerous and costly experiment that Democrats are proposing,” he said.

Source: Bloomberg

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