President Barack Obama made brief remarks Thursday on White House plans to “get this economy moving again.” He said that during his trip to Asia, he will discuss ways to boost U.S. exports while decreasing the global economic need for “American consumption and borrowing.”
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Mark Zandi, Chief Economist for Moody’s Economy.com, says the current economic recovery is “fragile and tentative” and thinks the risk of the country slipping back into recession is “uncomfortably high.” He believes this because although employers have slowed down layoffs, they have not begun to hire aggressively. (0:25)
Despite continued job loss, unemployment moderation in the past three months is a “good sign,” says Keith Hall, Commissioner of the Bureau of Labor Statistics. “While I would say we’re not in recovery yet, this is the path that we have to go through to get to recovery. We expect to see moderation first before we start actually getting improvement in the labor market,” he says. (0:27)
The Troubled Asset Relief Program (TARP) has been “key to stabilizing the financial system and preventing greater deterioration in the availability of credit,” says Assistant Treasury Secretary for Financial Stability Herbert Allison, Jr. Despite signs of economic recovery, “our financial system and our economy remain vulnerable…this is why Treasury must remain vigilant and press ahead in our economic stabilization efforts,” he adds. (0:57)
Despite positive signs of economic recovery, “the rate of job loss remains high and the unemployment rate has continued its steep rise,” says Federal Reserve Board Chairman Ben Bernanke. “Job insecurity, together with declines in home values and tight credit, is likely to limit gains in consumer spending,” he said. (0:21)
By Mariko Lamb – Talk Radio News Service
The pace of economic decline has shown signs of gradual stabilization since April, but the labor market continues to weaken, said Federal Reserve Board Chairman Ben Bernanke during testimony before the House Committee on Financial Services Tuesday.
“Many of the improvements in financial conditions can be traced, in part, to policy actions taken by the Federal Reserve to encourage the flow of credit,” he said. Federal Reserve recovery programs such as the Term Asset-Backed Securities Loan Facility (TALF) and the Supervisory Capital Assessment Program (SCAP), both implemented this year, have restarted classes of small business and consumer securitization markets, increased investor confidence in the U.S. banking system, and raised equity in public markets.
Despite better conditions in financial markets and optimistic economic prospects, the unemployment rate continues to rise. “Although the unemployment rate is projected to peak at the end of this year, the projected declines in 2010 and 2011 would still leave unemployment well above FOMC participants’ views of the longer-run sustainable rate,” Bernanke said.
Further Federal Reserve and Reserve Bank projections indicate “subdued” inflation over the next two years, a slight increase in output at the end of this year, and a gradual recovery starting in 2010 with some acceleration in 2011.
To quell GOP committee members’ concerns about the Federal Reserve’s extensive intervention in monetary policy, Bernanke said, “The extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed.”
Bernanke emphasized that the Federal Reserve is a non-partisan, independent organization and does not get involved in details of specific policy programs such as healthcare; however, he urged Congress to “think about the implications of the federal budget and make sure that we have a trajectory that will be sustainable for the medium term.”
U.S. economic recovery should be more export-oriented, environmentally oriented, bio and software-engineering oriented, and middle-class oriented, said Lawrence Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, Friday. (0:28)
“Recovery will take time and history suggests that there will be setbacks along the way,” said Lawrence Summers, Director of the National Economic Council and Assistant to the President on Economic Policy, but “the pervasive sense of fear of six months ago has receded” and “the American economy is again progressing.” (0:45)
The impact of the Recovery Act will peak in 2010, said Assistant to the President on Economic Policy, Lawrence Summers. “Now, five months after the passage, we are on track to meet that timeline,” he said. (0:32)
“Yes, the {resident has an ambitious agenda, but it is an agenda comprised of measures that lay a foundation for future prosperity and for the confidence on which the current recovery depends,” said Lawrence Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, during a report on the progress of the recovery of the U.S. economy Friday. (0:21)
