Oct. 29 (Bloomberg) -- President Barack Obama said U.S. economic growth in the third quarter affirms that the recession is abating, adding that the nation has “a long way to go” to fully recover and reduce unemployment.

He said a Commerce Department report that the economy grew at a 3.5 percent pace in the third quarter, after shrinking for four quarters, is “welcome news and an affirmation that this recession is abating.” It isn’t enough, he added.

“The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we’re creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well,” Obama told business leaders in a speech on the White House grounds.

Washington policy makers are seeking to sustain the recovery from the worst recession since the 1930s and boost job growth. The unemployment rate reached a 26-year high of 9.8 percent in September. A continuation of high unemployment may effect mid-term congressional elections a little more than a year from now.

In Congress, many lawmakers called the economy a nonpartisan issue even as Republicans and Democrats framed reactions according to their political purposes.

Republicans highlighted growing unemployment and questioned the effectiveness of Democratic policies, including a $787 billion stimulus package Obama signed into law in February.

Where Are Jobs?

“Three million Americans have lost their jobs since the bill was signed,” said Representative John Boehner, the top House Republican. “I’m pleased that the GDP numbers this morning were up. But the question is, where are the jobs?”

An $894 billion plan from House Democrats to rebuild the U.S. health-care system would “kill millions more American jobs,” Boehner told reporters.

The bigger-than-expected growth may strengthen Democrats in Congress, said House Financial Services Committee Chairman Barney Frank, who called the economic turnaround a response to Democratic fiscal and monetary policy. Economic growth weakens Republican arguments that Democratic priorities such as overhauling health care and limiting greenhouse gases should be put off until the economy improves, he said.

“They’re using the argument that this is a bad time,” Frank, a Massachusetts Democrat, said in an interview. The growth “undercuts that because it shows by the time these things go into effect we will be out of the recession.”

No Gloating

Representative Melvin Watt, a North Carolina Democrat, said work remains.

“I don’t think we can gloat about it until we get to increasing job numbers,” Watt said in an interview.

White House economic adviser Christina Romer said the economic growth is a “necessary first step” toward reducing the highest unemployment rate in decades,

“We need to keep it going so that we do finally see us adding jobs again and the unemployment rate finally coming down,” Romer, chairman of the White House Council of Economic Advisers, said today in an interview.

Today’s economic growth figures from the Commerce Department exceeded the forecast of 3.2 percent, according to the median estimate of 79 economists surveyed by Bloomberg News. Estimates ranged from gains of 2 percent to 4.8 percent.

Since the recession began in 2007, the U.S. has lost 7.2 million jobs. Unemployment has risen more than 2 percentage points since Obama took office in January. Economists project the jobless rate will exceed 10 percent by early 2010.

In the 12 months through June, the economy shrank 3.8 percent, the worst performance in seven decades. The four consecutive decreases mark the longest stretch of declines since quarterly records began in 1947.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net, and Lorraine Woellert in Washington at lwoellert@bloomberg.net

Last Updated: October 29, 2009 14:58 EDT