White House happy over GDP number, but stresses need for job growth
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The Obama administration today greeted the upbeat news -- that the economy is growing -- with joy, tempered by the reality that the job market continues to be a nagging problem.
The Commerce Department reported this morning that the gross domestic product grew at a 5.7% rate in the fourth quarter, the fastest pace since 2003. It is the strongest indication that the recession that shaped the U.S. economy and its politics is coming to an end.
“Today’s GDP report is the most positive news to date on the economy,’ Christina Romer, chairwoman of the Council of Economic Advisors, said in a statement posted on the White House website.
“While positive GDP growth is a necessary first step for job growth, our focus must remain on getting Americans back to work,” she said, emphasizing one of the Obama’s administration key points coming out of the State of the Union.
Economic growth, as measured in the gross domestic product, is the first step before companies start hiring people, which is why the job market usually lags any recovery. The government has tried to stimulate jobs with federal funds and tax credits.
Unemployment has remained at around 10% nationally, but most economists expect job growth to resume in the first half of the year.
Today, Obama travels to Baltimore to explain his plan to offer tax credits to companies that hire new workers, a proposal that drew a cool reception from Congress. The plan would give companies that create jobs a $5,000 tax credit for each net new worker they hire in 2010. There would also be an incentive for increasing the number of working hours.
Obama is expected to comment on the GDP numbers at his Baltimore stop; his comments are likely to be positive, while noting there is much more to be done. He made similar comments in recent jobs-related stops in Ohio and Florida.
This morning, Romer also sounded a cautionary note.
“As always, it is important not to read too much into a single report, positive or negative,” she said in her post. “There will surely be bumps in the road ahead, and we will need to continue to take responsible actions to ensure that the recovery is as smooth and robust as possible. Nonetheless, today’s report is a welcome piece of encouraging news.”
-- Michael Muskal
