U.S. economy on mend but has ways to go

9. February. 2010
Reuters

Top White House economic adviser Lawrence Summers said on Tuesday that the job market was stabilizing but the economy still had a long way to go to return to health.

"Clearly, we've got an economy with many people out of work who don't need to be," Summers told CNBC in an interview.

"There's no question that the growth rate will fluctuate from quarter to quarter and I think that everyone has recognized that there were some special factors in the fourth quarter," Summers said, referring to the 5.7 percent economic-growth rate recorded in the final three months of the year.

Summers, director of the White House National Economic Council, pushed President Barack Obama's proposal for a new round of stimulus measures, including tax breaks to spur business hiring and targeted tax credits for middle-class families.

The U.S. unemployment rate fell in January to 9.7 percent from 10 percent in December.

"We've got a long way to go," Summers said.

He voiced support for Obama's proposed "Volcker Rule" which would put new curbs on the size and scope of U.S. banks. The proposal is named after former Federal Reserve Chairman Paul Volcker, who leads an outside panel advising the White House.

Summers said it was crucial to rein in the "excesses of recent years" that had led to the financial crisis and recession.

"Of course, I support the proposals that the president has put forth with respect to controlling excessive risk-taking," Summers said.