Gene Sperling, the head of the White House’s National Economic Council, said that even as U.S. growth continues to recover, the world’s largest economy still hasn’t made sufficient progress.
“Obviously we haven’t come far enough, but I think you’ve seen the signs of healing,” Sperling said at a National Association for Business Economics meeting in New York today. “We have a long way to go” even though unemployment is declining “no matter how you measure it,” including among those who are discouraged about finding work, he said.
The nation has added about 4 million private sector jobs since the end of the recession in June 2009, which is a faster pace of job creation than the period after the last recession in 2001, Sperling said. The housing market and automotive industry are contributing to the economic rebound, he said.
Republican presidential candidate Mitt Romney is using unemployment as part of his pitch to voters that President Barack Obama doesn’t deserve a second term. The jobless rate fell to 7.8 percent last month after remaining above 8 percent since February 2009, the president’s first full month in office.
Lawmakers should agree on a budget plan that doesn’t endanger the economic recovery in the short term while also giving investors confidence in the nation’s fiscal outlook over the long term, Sperling said.
“A fiscal discipline plan that’s blind to the state of the recovery and causes too much immediate contraction can be counterproductive both for the recovery and deficit reduction,” Sperling said. Fiscal policy “can be less effective if it leaves doubt as to whether we are ever going to put our debt and deficits on a sustainable path.”
Leaders in both parties want to avoid the so-called fiscal cliff, the more than $600 billion of federal spending cuts and tax increases that will automatically take effect at the start of next year unless Congress acts, Sperling said. The automatic across-the-board cuts, known as sequestration, would come each year through 2021.
“Nobody wants the sequester to take place,” Sperling told economists today.