White House sees hope in economy, races to replenish 'cash for clunkers' fund

President Obama said new, better-than-expected gross domestic product numbers show that the country is headed in the right direction, and that "the recession we faced when I took office was even deeper than anyone thought at the time."

The president also said the massive, $700 billion economic stimulus package "helped pull the nation back from the brink."

The economy "has done measurably better that we had thought -- better than expected. And as many economists will tell you, that part of the progress is directly attributable to the Recovery Act," Obama said this afternoon. "This and other difficult but important steps that we've taken over the last six months have helped us put the brakes on the recession."

But the president added that the good economic news is cold comfort for those withouth jobs and families struggling to make ends meet.

"When we receive our monthly jobs report next week, it's likely to show that we're still continuing to lose far too many jobs. As far as I'm concerned, we won't have a recovery as long as we keep losing jobs," Obama said. "And I will not rest until every American who wants a job can find one."

Nevertheless, "history does show that you need to have economic growth before you have job growth," Obama said. "And today's GDP is an important sign that the economy is headed in the right direction and that business investment, which had been plummeting in the last several months, is showing signs of stabilizing. This means that eventually, businesses will start growing and they'll start hiring again. And that's when it will truly feel like a recovery to the American people."

The Commerce Department reported that the economy shrank by 1 percent in the second quarter of the year, giving hope that the longest recession since World War II is easing.

"Obviously that's the right direction," Christina Romer, one of the president's top economic advisers, said on MSNBC. "We've got a long way to go."

The revised number in the first quarter was down 6.4 percent, the biggest decline in nearly three decades -- showing that the recession was even worse than believed at the time and proving that the $787 billion stimulus plan and other government spending was necessary, said Romer, chairwoman of the White House Council of Economic Advisers.

"We absolutely had to rescue this economy," she said.

For the economy to truly rebound, she said, there needs to be 2 percent to 3 percent real growth.

Obama and Romer also tried to reassure Americans that one initiative won't be a victim of its own success.

The "cash for clunkers" program has been so popular that consumers have already emptied the $1 billion fund.

"Not more than a few weeks ago, there were skeptics who weren't sure that this "Cash for Clunkers" program would work," Obama said. "But I'm happy to report that it has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers."

"And I'm encouraged that Republicans and Democrats in the House are working to pass legislation today that would use some Recovery Act funding to keep this program going -- funding that we would work to replace down the road," the president said. "Thanks to quick bipartisan responses, we're doing everything possible to continue this program and to continue helping consumers and the auto industry contribute to our recovery."

"If you wanted to buy a car this weekend, go do it," Romer told Reuters Television. "The program is still there. It has not been suspended, and I can tell you there is a real flurry of activity working with the agencies, the Congress, to ensure we can continue this and get the funds there."

The Associated Press is reporting that Democrats in both the House and Senate are exploring votes as early as today to add $2 billion into the rebate program.

Representative Sander Levin of Michigan revealed the bill after he and other lawmakers were assured by Transportation Secretary Ray LaHood that the program would continue at least through today while the Obama administration looked for more money, the AP says.