In the Diplomatic Reception Room this afternoon, President Obama tried to put a positive spin on Gross Domestic Product numbers released this morning indicating that the economy contracted by -1% in the 2nd quarter of this year.
The president said the not-as-horrible-as-anticipated economic contraction was “an important sign that the economy is heading in the right direction and that business investment which had been plummeting in the last several months is showing signs of stabilizing.”
The President said “the GDP revealed that the recession we faced when I took office was even deeper than anyone thought at the time. It told us how close we were to the edge.”
But the fact that the contraction in the 2nd quarter wasn’t as bad as some economists had predicted – and was somewhat less horrible than the -6.4% contraction during the first quarter of the year – was a good sign, the president said.
“The GDP also revealed that in the last few months the economy has done measurably better than we had thought,” he said. “Better than expected. And as many economists will tell you, that part of the progress is directly attributable to the Recovery Act.”
Mr. Obama said the $787 billion stimulus bill as well as “other difficult but important steps we have taken over the last six months have helped us put the brakes on the recession.”
Those steps included efforts to stem the tide of foreclosures, to unfreeze credit, tax cuts for families and small businesses, and safety net provisions for the unemployed and states strapped for cash.
“Now I realize that none of this is much comfort to those Americans who are still out of work and struggling to make ends meet and when we receive our monthly jobs report next week, it’s likely to show we’re still continuing to lose far too many jobs,” he predicted. “As far as I’m concerned, we won’t have a recovery as long as we keep losing jobs. And I will not rest until every American who wants a job can find one. But history does show you need to have economic growth before you have job growth.”
The president said the GDP numbers indicated “that eventually businesses will start growing and will start hiring again. And that’s when it will truly feel like a recovery to the American people.”
This will come with a new economy – not one “where our growth is based on inflated profits and maxed-out credit cards because that doesn’t create a lot of jobs. We need a robust growth based on a highly educated well trained work force, health care costs that aren’t dragging down businesses and families, clean energy jobs and industries. That’s where our future is and that’s where the jobs are.”
The president took a few moments to herald the stimulus program called “cash-for-clunkers,” where consumers can trade in their older, less fuel-efficient cars for credit towards the purchase of newer more fuel-efficient cars. “This gives consumers a break, replaces dangerous carbon pollution and our dependence on foreign oil and strengthens the American auto industry.”
A few weeks ago there were skeptics unsure that cash-for-clunkers would work, the president recounted, “but I’m happy to report that is has succeeded well beyond our expectations and all expectations and we’re already seeing a dramatic increase in showroom traffic at local car dealers. It’s working so well that there are legitimate concerns that the funds of this program might soon be exhausted.”
The White House is currently “working with Congress on a bipartisan solution to ensure that the program can continue for everyone out there who is still looking to make a trade. And I’m encouraged that Republicans and Democrats in the House are working to pass legislation today that would use some Recovery Act funding to keep this program going--funding that we would work to replace down the road.”
The president said he’s “guardedly optimistic about the direction that our economy is going but we’ve got a lot more work to do.”