US President Barack Obama said on Friday the economy was showing “glimmers of hope” despite continuing stresses, and he signaled more steps to brighten the business climate.
Obama commented to reporters after meeting at the White House with members of his economic team, including US Treasury Secretary Timothy Geithner, economic adviser Larry Summers and Federal Reserve Chairman Ben Bernanke.
“What we’re starting to see is glimmers of hope across the economy,” the president said, although he added that the economy was “still under severe stress.”
“Whatever we do ultimately has to translate into economic growth and jobs,” Obama said.
He spoke a day after the release of encouraging trade and jobless figures pushed stocks higher, and Summers predicted the economy would emerge from a sense of “freefall” by the middle of the year.
Obama said there has been a significant uptick in the number of home owners seeking to refinance their mortgages, which will put money back into their pockets. He said a 20 percent increase last month in the Small Business Administration’s largest program means that small companies, often prized as the backbone of the economy, “are starting to get money.”
But Obama also pointed to the high unemployment rate — which climbed to a 25-year high of 8.5 percent last month — and acknowledged that “we’ve still got a lot of work to do.”
“We’re starting to see progress,” he said. “And if we stick with it, if we don’t flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track.”
Obama made no mention of “stress tests” being conducted at 19 major US banks. The results, due at the end of this month, are anxiously awaited by the financial markets.
The White House said Obama was to receive a status report on those appraisals on Friday. Attempting to assess banks’ capital needs, the government is testing how they would fare under more adverse economic conditions than are expected.
Mindful of market sensitivity, the US Treasury Department is asking banks not to talk about the stress tests as part of their first-quarter earnings results, a source familiar with government discussions said.
Asked whether banks were being told to be silent, Obama adviser Austan Goolsbee told Fox Business Network: “You ought to wait until the proper announcement time of all the bank examinations together, rather than have individual banks come running forward revealing their individual information alone.”
Obama did say, however, that he and his advisers discussed a program to use public-private sector investment funds to help banks clear their books of toxic assets.
He also voiced confidence that his administration was addressing problems in both the troubled banking system as well as non-bank financial institutions, a sector that escaped adequate regulatory scrutiny before the latest crisis.
Also at the meeting were Christina Romer, who heads the White House Council of Economic Advisers; Sheila Bair, chairwoman of the Federal Deposit Insurance Corp; Securities and Exchange Commission Chairwoman Mary Schapiro; and Comptroller of the Currency John Dugan.