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August 2, 2009

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Obama warns crisis is not over yet

PRESIDENT Barack Obama warned yesterday it would take "many more months" for the United States to get out of recession even after GDP figures showed the economy shrank only modestly in the second quarter.

Obama, who has defended his administration's economic policies vigorously in recent weeks in the face of worsening unemployment numbers, said jobless figures this week would still show too many Americans losing work.

"It will take many more months to fully dig ourselves out of a recession - a recession that we've now learned was even deeper than anyone thought," Obama said in his weekly radio and Internet address.

"And when we receive our monthly job report next week, it is likely to show that we are continuing to lose far too many jobs in this country. As far as I'm concerned, we will not have a recovery as long as we keep losing jobs."

Economists said gross domestic product data on Friday provided clear evidence the 19-month recession was almost over. Obama, echoing his comments from the previous day, said that was proof his US$787 billion stimulus package and other economic initiatives had shown dividends.

"In the last few months, the economy has done measurably better than expected," Obama said, referring to the GDP report.

"And many economists suggest that part of this progress is directly attributable to the Recovery Act. This and the other difficult but important steps that we have taken over the last six months have helped put the brakes on this recession."

Obama repeated his message that economic growth must come before job growth would follow and said the figures showed the country was moving in a better direction.

"The report yesterday on our economy is an important sign that we're headed in the right direction," he said.

"Business investment, which had been plummeting in the past few months, is showing signs of stabilizing. This means that eventually, businesses will start growing and hiring again."

Obama's comments on the economy marked a small change in emphasis after weeks of focusing most of his public remarks on healthcare reform. Senator John Thune of South Dakota, in the Republican weekly address, said the Democratic president's healthcare plans were too expensive.

"In this difficult recession, Americans and our government are already over-extended," Thune said.

"The Democrats have been spending money and racking up debt at an unprecedented pace, and their government-run healthcare would only make things worse."


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