Beijing Olympics: 'Glimmers' of hope, but US not out of woods: Obama

US President Barack Obama said Tuesday he saw "glimmers of hope" as America battles the deepest economic slump in generations but warned of painful choices and more deep job cuts to come.

"There is no doubt that times are still tough," Obama said in a sweeping survey of his attempts to piece together an economic rescue "puzzle" and also justified unpopular bailouts for the banking and finance industries.

"By no means are we out of the woods just yet. But from where we stand, for the very first time, we are beginning to see glimmers of hope," Obama said in a speech billed as an update to Americans on his recovery strategy.

Federal Reserve chief Ben Bernanke meanwhile said there were initial signs that the US recession may be easing but warned of the need for financial stability for full recovery.

He noted "tentative signs that the sharp decline in economic activity may be slowing," citing data on home sales, home building and consumer spending, including sales of new motor vehicles.

Obama, three months into a presidency already dominated by the crisis, warned his efforts to restructure the once-mighty US auto industry and crippled insurance giant AIG would "involve difficult and sometimes unpopular choices."

And he forecast more job cuts and mortgage foreclosures before the economy turns around, in remarks balancing optimism for the future with a sober assessment of more rough times to come.

Obama said in the speech at Georgetown University that "2009 will continue to be a difficult year for America's economy.

"The severity of this recession will cause more job loss, more foreclosures, and more pain before it ends," he warned.

"The market will continue to rise and fall, credit is still not flowing nearly as easily as it should.

"The process for restructuring AIG and the auto companies will involve difficult and sometimes unpopular choices," Obama said, in an address styled as a direct and frank economic update to the American people.

"All of this means that there is much more work to be done and all of this means that you can continue to expect an unrelenting, unyielding, day-by-day effort from this administration to fight for economic recovery on all fronts."

Obama's comments came on a day when more grim economic data sketched the depths of the recession, taking the Dow Jones Industrials Average down 1.71 percent.

US retail sales fell a surprise 1.1 percent in March after two months of gains and business inventories fell a bit more than expected in February, by a seasonally adjusted 1.3 percent from January.

In his speech, the president walked a fine line between condemning corporate excess and justifying the expenditure of public money to save the crippled finance industry.

"I promise you, nobody is more frustrated than me with AIG," he said, referring to the insurance giant which has received more than 180 billion dollars in government cash.

"We've had to provide support for AIG because the entire system, as fragile as it is could be profoundly endangered if AIG went into a liquidation bankruptcy."

Despite the president's disdain for polls, the White House will likely welcome results of a new survey by CNN and Opinion Research, which showed 58 percent of Americans believe Obama has a clear plan to tackle the recession.