Washington: The fragile US economy is on the path to recovery but is still far from back to normal, White House economist Christina Romer said on Saturday.
Romer, chairwoman of President Barack Obama's Council of Economic Advisers, said the signs were improving but the economy is still suffering from a shortfall of aggregate demand as it emerges from what has been termed the Great Recession.
"By almost every indicator, the US economy is finally on the road to recovery," Romer said at Princeton University.But citing a March jobless rate of 9.7 per cent, she cautioned: "When it comes to the economy we are very far from normal."
Obama has made job creation a top priority, mindful that persistently high unemployment could mean heavy losses for his Democrats in November's congressional elections.
While acknowledging serious concern that some Americans face long-term unemployment, Romer pushed back against economists who have asserted that high joblessness is now built into the economy and has become the "new normal".
"The overwhelming weight of the evidence is that current very high and very disturbing levels of overall and long-term unemployment are not a separate structural problem but largely a cyclical one. It reflects the fact that we are still feeling the effects of the collapse of demand caused by the crisis," Romer said.
