Acknowledging that the US economy remains in a “very deep recession”, President Barack Obama has announced plans to accelerate stimulus spending to save or create 600,000 jobs over the next three months.
Obama’s candid assessment of the state of the economy followed the loss of another 345,000 jobs in May, which pushed the US unemployment rate to 9.4 per cent, a 26-year high.
“It’s a reminder that we’re still in the middle of a very deep recession that was years in the making and that’s going to take a considerable amount of time for us to pull out of,” said on Monday before meeting with his cabinet.
Obama said the job losses were less than expected, a sign that his $US787 billion ($A980 billion) economic stimulus plan was moving in “the right direction,” but not quickly enough to ward off concerns of a “self-reinforcing” downward spiral.
“Our whole task here with the recovery act is to reverse that negative cycle into a positive cycle and it’s going to take some work,” he said.
Accelerate stimulus spending
Obama said the government was ready to accelerate stimulus spending with the goal of creating of saving 600,000 jobs over the next 100 days through summer youth programs, school and public works projects.
In a statement, the White House said the 600,000 jobs represented “four times the number created or saved in the first 100 days” since the plan was signed into law on February 17 — about 150,000 jobs.
So far, $US135 billion ($A168 billion) have been obligated under the stimulus plan, which Obama has said would create or save more than three million jobs over two years, a number critics have charged is difficult to verify.
A new Gallup poll released on Monday showed that while 67 per cent of Americans viewed Obama favorably, only 45 per cent approved of his handling of federal spending — with a 51 per cent majority disapproving.
The 10 new projects announced included improvements on 98 airports and more than 1,500 highways, federal funding for 135,000 education jobs and maintenance work at 359 military bases and other facilities.
“The only measure of progress is whether or not the American people are seeing some progress in their own lives,” Obama said.
“And so although we’ve seen some stabilising in the financial markets and credit spreads have gone down, we’re seeing a reduction in the fear that gripped the market just a few months ago,” he said.
Obama’s plans have been criticised by some economists, who accuse him of increasing an already record public deficit, and by his Republican foes, who doubt his plans will effectively turn the tide on the economic slump.
White House economic adviser Austan Goolsbee warned that the unemployment rate was likely to continue to rise as more stimulus projects receive federal funding.
“I don’t think there’s any question it’s going to be a rough patch not just in the immediate term, but for a little bit of time,” he told the Fox News Sunday program.