WASHINGTON (AFP) – US President Barack Obama Tuesday dismissed fears of a plunge into a "double-dip" recession and warned against "panic" over dismal economic data that is beginning to cloud his reelection hopes.
In a news conference with German Chancellor Angela Merkel, Obama responded to signs the recovery may be slowing and sought to assure "skittish and nervous" investors and voters that better times lay ahead.
"I am not concerned about a double-dip recession," Obama said, empathizing with people who were frustrated that growth had not been unleashed more quickly.
"I'm concerned that the recovery we're on is not producing jobs as quickly as I wanted to happen," he said, adding there was "enormous work to do" to strengthen the recovery after the worst recession in decades.
As Republicans fire up their race for the party White House nomination and lambast Obama's economic policies as a failure, the president recalled that the world came close to a "complete disaster" back in 2009-2010.
"Recovering from that kind of body-blow takes time," Obama said, admitting that in recent weeks the economy had faced strong "headwinds."
"Recovery is going to be uneven. There are going to be times where we are making progress, but people are still skittish and nervous, and the markets get skittish and nervous."
"Our task is not to panic, not overreact, to make sure that we've got a plan, a path forward," he said, noting the need to tend to structural issues and fundamentals that would promote growth and a sound business environment.
Obama spoke at length about the state of the economy after the unemployment rate spiked to 9.1 percent last week, as other data showed a moribund housing market and slowed manufacturing growth.
Numerous private sector economists have lowered estimates for second quarter GDP growth to under 2.0 percent, down from 3.0 percent growth rate forecasts for the year that would have conjured up hundreds of thousands of jobs.
The dismaying evidence that the recovery may be stalling has offered a sudden opening to Republicans, especially those running nascent presidential campaigns, who know many Americans are yet to feel evidence of a recovery.
Mitt Romney, the putative Republican frontrunner for the 2012 election slammed Obama for saying the jobs data was a "bump in the road" and issued an indictment of administration policies he said had "failed America."
The attacks appear based on solid political logic: in a new Washington Post/ABC poll released Tuesday six in 10 Americans gave Obama negative marks on the economy.
More crucially, two thirds of independents -- the voting bloc which often decides US presidential elections, disapproved of the president's economic policies.
Obama said he and Merkel had a long discussion about the global economy, and warned that Europe's debt crisis gripping nations such as Greece, Ireland, and Portugal "cannot be allowed" to threaten the broader global economy.
"We think it would be disastrous for us to see an uncontrolled spiral and default in Europe, because that could trigger a whole range of other events," he said, but added he was confident European powers could handle the crisis.
"This is a tough and complicated piece of business. And ultimately Europeans are going to have to make decisions about how they proceed," Obama said, arguing that Greece would need outside support to promote growth.
"Given their level of debt, it also means that other countries in the eurozone are going to have to provide them a backstop in support.
"And frankly, people who are holding Greek debt are going to have to make some decisions, working with the European countries in the eurozone, about how that debt is managed."
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