US President suggests signs of recovery but retail sales fall
Barack Obama has suggested that the US economy is seeing signs of progress but has stressed that times are still challenging.
The President, who was delivering his latest economic speech at Georgetown University, said that this year will still be tough for the US economy with rising unemployment and more repossessions.
Last month alone, the economy lost 663,000 jobs, sending the unemployment rate to 8.5% – a 25-year high.
However, Mr Obama said there are signs that the recession is easing but “ we are by no means out of the woods just yet.”
Mr Obama said necessary parts of the “recovery puzzle” lie in his $787 billion stimulus package, aimed at recapitalising banks, unfreezing credit markets, stabilising the housing market and strengthening the struggling the US car industry.
The President’s comments echo those of US Federal Reserve chairman, Ben Bernanke, who also said the recession is easing.
Mr Bernanke, who was addressing Atlanta’s Morehouse University, said: “A levelling out of economic activity is the first step towards recovery”.
However, the Fed chief pointed out that without the stabilisation of the financial system and credit markets, there will not be a sustainable recovery.
However, the two statements came after figures from the Commerce Department revealed that US retail sales fell 1.1% following two months of increases, suggesting that consumers remain cautious about the economy.
The news from the Commerce Department sent the Dow Jones Industrial Average down nearly 100 points, however, bank shares performed well after Goldman Sachs exceeded analysts expectations by reporting higher-than-expected quarter one profits.