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Obama says U.S. economy "still hurting"

09-21-2010 11:23 BJT

WASHINGTON, Sept. 20 (Xinhua) -- U.S. economy is still not out of woods even though the longest recession the country has endured since the Great Depression has been officially declared over.

The National Bureau of Economic Research (NBER), an authorized panel of academic economists based in Cambridge, Mass., said the recession lasted 18 months. It started in December 2007 and ended in June 2009.

Previously the longest post World War II downturns were those in 1973-1975 and in 1981-1982. Both of those lasted 16 months.

But according to U.S. President Barack Obama the economic situation remains challenging.

"The hole was so deep that a lot of people out there are still hurting," Obama addressed a town-hall-style meeting telecast live on CNBC before heading to Pennsylvania to raise money for a Democratic Senate candidate.

He spoke shortly after the NBER announcement.

"Even though economists may say that the recession officially ended last year, obviously for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, it's still very real for them." Obama said.

U.S. unemployment, currently at 9.6 percent, is projected not possible to fall significantly in the short future. About 8 million Americans remain out of work now.

Many will continue to struggle.

Unemployment usually keeps rising well after a recession ends. Four months after the 2007 downturn ended, unemployment spiked to 10.1 percent in October 2009, which was the highest in just over a quarter-century. Some economists believe that marked the high point in joblessness. But others think it could climb higher -- perhaps hitting 10.3 percent by early next year.

After the 2001 recession, for instance, unemployment didn't peak until June 2003 -- 19 months later.

Any future downturn in the economy would now mark the start of a new recession, not the continuation of the December 2007 recession, NBER said.

That's important because if the economy starts shrinking again, it could mark the onset of a "double-dip" recession. For many economists, the last time that happened was in 1981-82.

Republicans criticized that the Obama administration's economic policy failed, at least in terms of unemployment rate. They called for Obama to fire both of his top economic advisers -- Treasury Secretary Timothy Geithner and chief economic adviser Lawrence Summers.

He said that "the most important thing we can do right now is grow our economy."

The U.S. economy grew at 1.6 percent in the second quarter, a much slower pace that the previous quarter, which recorded a growth of 3.7 percent.

Many economists believe that this round of financial crisis has exposed the deep problems of the U.S. economy. It will be a long and bumpy way to get the economy back on the fast growing track.

Editor:Xiong Qu |Source: Xinhua

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