Summers: Economy still has ‘long way to go’

President Obama’s chief economic adviser said Sunday that more than a year after passage of the $860 billion stimulus bill, the U.S. economy still has “a long way to go.”

Lawrence H. Summers, director of the National Economic Council, said that despite a modest rise last month in employment, pushing the unemployment down from its current 9.7 percent rate won’t be easy.

“It is the president’s preoccupation to put people back to work,” said Mr. Summers, who appeared on several Sunday talk shows. “The trend has turned, but to get back to the surface, we’ve got a long way to go, and that’s what we’re fighting to do every day.”

Another top White House economic adviser, Christina Romer, who heads the Council of Economic Advisers, predicted renewed job growth but also said there’s a “big hole” in the economy from job losses because of the recession.

Like Mr. Summers, she said Americans still face “a lot of head winds” from the financial crisis that began at the end of President George W. Bush’s term.

Both advisers extolled March’s job increase of 162,000, but many economists have dismissed the growth because many of the jobs are temporary. The unemployment rate remained unchanged from the previous month.

Still, the March numbers were the highest growth rate in three years, a fact the advisers said bodes well for the future.

“The number of projects in which we’ll be investing in the first half of 2010 is nearly twice what it was in the second half of 2009, so it will gather force,” Mr. Summers said. “I would expect continued progress in job creation.”

Mr. Summers predicted that the economy will continue creating jobs, but slowly, and that the unemployment rate will decline slowly because more people will start trying to find work as the economy improves.

Mr. Summers, who was a secretary of the Treasury in the Clinton administration, also said he expects Congress to pass financial reform legislation soon. The Senate, where the bill has stalled, is weighing regulatory reform, and Mr. Summers said passage “won’t be easy.”

The bill, sponsored by Sen. Christopher J. Dodd, Connecticut Democrat, would set up a new council of regulators to assess financial risk, create a process for liquidating distressed financial firms and crack down on derivatives markets.

Mr. Obama has said he wants to see the bill passed in the Senate within two weeks, and Mr. Summers said, “I expect that reform is going to pass.”

Both advisers also refused explicitly to target financial practices by China, the largest holder of U.S. promissory notes. Mr. Summers declined to say whether the United States saw China as manipulating its currency.

“There are clearly crucial issues with respect to commercial practices in a number of countries, including China,” he said.

Mrs. Romer also would not say whether China manipulates its currency, but said the White House thinks China’s yuan “needs to be more influenced by market forces.”

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