Obama urges action as White House sees continuing recession (Lead)January 17th, 2009 - 7:48 am ICT by IANS
Washington, Jan 17 (DPA) US president-elect Barack Obama Friday called for urgent action to stem the country’s economic decline, lending his backing to a $825-billion stimulus package introduced by lawmakers Thursday.The outgoing Bush administration said it expects the US recession to continue through at least the first half of 2009 and unemployment to surge to 7.7 percent this year, according to a White House forecast issued Friday.
But Obama warned that even with a massive injection of public cash into the world’s largest economy “things could get worse before they get better.”
“I want everybody to be realistic about this,” Obama said in a speech at a factory in Ohio.
Some 2.6 million Americans lost their jobs in 2008 amid the worst economic crisis in decades. The US has been in recession since December 2007.
US government figures released Friday showed that inflation for 2008 was 0.1 percent, the lowest figure in more than 50 years as oil prices plummeted and retailers cut prices to lure in consumers. The US Labour Department said consumer prices fell 0.7 percent in December.
But the White House said the chips were in place for a strong recovery in Obama’s administration, which takes over Tuesday.
A “vigorous” recovery is expected in 2010 and 2011, when growth should jump back to 5 percent, on a fourth quarter to fourth quarter basis. Unemployment should fall back down to 5 percent by 2012.
The White House forecast a 0.2-percent contraction of the economy in 2008, ending six straight years of positive growth, but said the economy would grow by 0.6 percent in 2009.
The White House’s growth figures for any year include the final quarter of the previous year.
The White House’s forecast was more positive than most independent economic think tanks have predicted. The International Monetary Fund has forecast a 0.5-percent contraction from the fourth quarter of 2008 to the fourth quarter of 2009 and is likely to revise those figures downward in an update later this month.
Obama said the year-long recession in the US was “unlike any we’ve seen in our lifetime.” It had “never been more urgent” to act to halt the economic slide.
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