Obama: Progress seen on economy

WASHINGTON - President Obama said yesterday he was "starting to see progress" toward a recovering economy even as it was "still under severe stress."

He also signaled more steps by the federal government to brighten the business climate.

"What we're starting to see is glimmers of hope across the economy," Obama told reporters at the White House after receiving an update from members of his economic team, including Federal Reserve Chairman Ben S. Bernanke, Treasury Secretary Timothy Geithner, economic adviser Larry Summers, and Sheila Bair, head of the Federal Deposit Insurance Corp.

Obama cited increased refinancing of home mortgages, money flowing from the $787 billion stimulus package, and a 20 percent increase in government-backed loans to small businesses "over the last month alone."

Still, "we're still seeing a lot of job losses, a lot of hardship," he acknowledged. The economy has been in a recession since December 2007. More than five million Americans have lost jobs since then, credit markets are largely frozen, and stock prices remain down sharply - even with a rally in the last few weeks.

Yesterday's hour-long meeting centered on stimulating the economy, stabilizing banks, reducing strain in the credit markets, the rising unemployment rate, mortgage refinancing, and the health assessment of banks, including "stress tests" being conducted this month by the Fed.

"The economy's still under severe stress," the president said, "and obviously during these holidays we have to keep in mind that whatever we do ultimately has to translate into economic growth, and jobs, and rising incomes for the American people."

Obama said he and his top advisers were setting the stage in coming weeks for other steps to bolster the economy. He gave no clues about what they might be.

He said there had been a significant uptick in the number of homeowners seeking to refinance their mortgages, which will put money back into their pockets as their monthly payments drop.

The president also cited March's increase in activity for the Small Business Administration's largest loan program. Small companies, often prized as the backbone of the economy, "are starting to get money," he said.

But Obama also pointed to the high rate of joblessness - which climbed to a 25-year high of 8.5 percent in March - and acknowledged that much work remained.

"We're starting to see progress," he declared, "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 said he and his advisers discussed a program to help banks clear their books of bad assets that have made normal lending difficult if not impossible.

President Obama cited economic "glimmers of hope," but there are continuing problems.

The Good

Small-business loans:

Up 20 percent in March.

Mortgage rates:

At 4.73 percent,

the lowest since 1971.

Factory orders:

Up in February.

Home sales:

Rose in February.

SOURCE: Inquirer research

The Bad

Unemployment:

Rose to 8.5 percent

in March.

Retail sales:

Fell in March for the sixth straight month.

Gross domestic product: Probably shrank at a 5 percent annual rate

in the 2009 first quarter.

Dow industrials:

Down 6,081 points, or

43 percent, from their October 2007 high.

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