4 Mar 2009

No early turnaround for US economy: Obama

7:35 am on 4 March 2009

President Barack Obama said on Tuesday he saw little hope of near-term improvement in the US economy.

The government announced on Friday that GDP shrank by 6.2% in the fourth quarter of 2008. The amount was worse than expected.

In a speech at the Department of Transportation, Mr Obama described economy's performance in the last quarter of 2008 as the worst in over 25 years.

He said the first quarter of this year holds little promise for better returns.

He said one of the main challenges facing the government was to unlock frozen credit markets.

The Federal Reserve earlier announced it would begin lending up to $US200 billion initially to spur consumer and small business borrowing for autos, education, credit cards and other expenses. The plan was first announced late last year.

Two weeks ago, Mr Obama signed a $US787 billion stimulus package aimed at jolting the economy out of recession.