Obama Sees Signs Economy to Grow While Unemployment Stays High

Sept. 20 (Bloomberg) -- President Barack Obama said the U.S., while showing many signs of emerging from recession, will probably face high unemployment for some time.

“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,” Obama said today in an interview on CNN’s “State of the Union” program. “We lost so many jobs that making up for those that have already been lost is going to require really high growth rates.”

The unemployment rate reached 9.7 percent in August, a quarter-century high, and employers have eliminated almost 7 million jobs since the recession started, the biggest drop in any post-World War II economic downturn. Banks worldwide have recorded more than $1.6 trillion of losses and writedowns since the start of 2007, data compiled by Bloomberg show.

“All the signs are that the economy’s going to start growing again,” Obama said, citing improving manufacturing and financial markets. At the same time, he said he would “leave it up to” Federal Reserve Chairman Ben S. Bernanke to declare whether the recession is over.

The Fed chief said Sept. 15 that the worst U.S. slump since the 1930s has probably ended, while warning that growth may not be strong enough to quickly reduce the unemployment rate.

“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time,” Bernanke said. The remarks were his most explicit statement that the contraction that began in December 2007 is over.

“We’re probably not going to start seeing enough job creation to” keep pace with “a rising population until some time next year,” Obama said. “You need 150,000 additional jobs each month just to keep pace with” population growth.

The economy will rebound at a 2.3 percent pace next year, according to the median estimate in a Bloomberg News survey of economists. The growth rate won’t be fast enough to lower the unemployment rate below 9 percent, the economists predict.

Bernanke convenes the next meeting of Fed policy makers Sept. 22-23 in Washington.

Posted in: World News