Obama warns of 'tough headwinds' for U.S. economy

Agence France-Presse

Posted at Jun 04 2011 11:29 PM | Updated as of Jun 05 2011 07:29 AM

WASHINGTON, USA - U.S. President Barack Obama warned Saturday that the U.S. economy still faced "tough headwinds," as he welcomed newly created jobs in the once-troubled automobile industry.

"Even though our economy has created more than 2 million private sector jobs over the past 15 months and continues to grow, we're facing some tough headwinds," the president said in his weekly address.

"Lately, it's high gas prices, the earthquake in Japan and unease about the European fiscal situation."

The comments came after dismal statistics on new job creation and an uptick in the unemployment rate sent U.S. stocks plunging Friday and raised a new barrier for Obama's troubled economic agenda.

The economy added a paltry 54,000 new jobs last month, one quarter of the February-April pace, while the unemployment rate edged up to 9.1 percent, figures from the Labor Department showed.

While the White House and economists cautioned that the poor data was likely a monthly blip, it fueled allegations that Obama's economic policies are failing, 18 months ahead of the next presidential election.

The dire data submerged Wall Street's week in gloom, with investors fretting joblessness and other maladies will spell an extended period of slow growth.

The Dow Jones Industrial Average fell 2.3 percent during the week, finishing at 12,151.26 points. The Nasdaq fell 2.3 percent to 2,732.78 points and the larger S&P 500 was down by the same percentage to 1,300.16 points.

Obama used the rebound of the U.S. car industry, after bailouts and government-managed bankruptcies taken by General Motors and Chrysler, as a symbol of his wider economic policy and to repel Republican attacks.

The industry has added 115,000 jobs since GM and Chrysler exited bankruptcy and, along with Ford, are now churning out profits and popular new energy efficient models.

The president noted that all three American automakers were now adding shifts and creating jobs at the strongest rate since the 1990s.

"Chrysler has added a second shift at the Jefferson North plant in Detroit that I visited last year," he said. "GM is adding a third shift at its Hamtramck plant for the first time ever. And GM plans to hire back all of the workers they had to lay off during the recession."

Obama warned of "bumps on the road" to complete recovery, but expressed confidence that Americans will overcome these difficulties.

"We're a people who don't give up -- who do big things, who shape our own destiny," he continued. "And I'm absolutely confident that if we hold on to that spirit, our best days are still ahead of us."