President Barack Obama said he and Federal Reserve Chairman Ben Bernanke agreed on Tuesday the U.S. economy is strengthening but has hit headwinds from Europe that demand pushing the pace of growth to get more Americans back to work.
Ahead of Friday's June unemployment report that is expected to show a small rise in joblessness, Obama said there have been positive trends in some business sectors but economic troubles abroad were having an effect.
"Because of the troubles that we've seen in Europe, we're now seeing some headwinds and some skittishness and nervousness on the part of the markets and on the part of business and investors. And so we're still going to have to work through that," Obama told reporters.
Two days after the Group of 20 leaders wrapped up a meeting in Canada, Bernanke also stressed the importance of keeping an international perspective on economic developments.
"What's happening around the world in the emerging markets, in Europe, affects us here in the United States and it's important for us to take that global perspective as we discuss the economy," the head of the U.S. central bank said.
The two men spoke to reporters after a wide-ranging Oval Office meeting of Obama's economic team that centered on the U.S. economy and the president's push for an overhaul of financial rules that is awaiting final congressional approval.
Obama expressed confidence that the measure would pass and said it would provide certainty to financial markets and help consumers as the United States recovers from the financial crisis of 2007-2009 and the worst recession since the 1930s.
Obama said he was confident "that senators, hopefully on both sides of the aisle, recognize it's time we put in place rules that prevent taxpayer bailouts and make sure that we don't have a financial crisis that can tank the economy."
"And I think there's going to be enough interest in moving reform forward that we're going to get this done," he said.
Asked whether the death of Democratic Senator Robert Byrd this week would make financial reform more difficult, Obama said he saw Byrd's death as the loss of a friend and did not think of it in terms of the overhaul.
PRESSURE TO CREATE JOBS
Obama is under pressure to create jobs as Americans struggle with a nearly 10-percent jobless rate and his Democrats face the potential of losses to Republicans in November's congressional elections.
"We can't let up. We're going to have to continue to be vigilant," Obama said.
"I know that the chairman (Bernanke) feels the same way with respect to his role. And we look forward to working together in our respective institutions to make sure that we keep this recovery going on track."
According to a Reuters survey, economists say employment probably fell by 110,000 positions in June as more than half of the census workers recruited in May were laid off, which would lift unemployment to 9.8 percent from the 9.7 percent in May.
But private hiring, seen as a better gauge of labor market health, probably picked up after unexpectedly slowing in May.
Obama said economic trends will be good if the United States extends jobless benefits.
"We're going to have to keep on paying a lot of attention to the labor markets and helping people who have been displaced during the last couple of years get back into the labor market. So that's going to be a major challenge," he said.
Obama spoke on a day the Dow Jones Industrial Average of major stocks dropped below 10,000 points. The index was down about 2.5 percent in early afternoon trading.
"We've got to continually push the pace of economic growth in order to put people back to work. That ultimately is the measure for most Americans of how well we are economically doing," Obama said.
At the G20 summit in Toronto, Obama and other leaders of rich and developing countries were divided on how much to tackle soaring debt and how much to continue stimulating their economies in the midst of a fragile global recovery.
