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U.S. economy has stepped back from brink: Obama

The U.S. economy is showing signs of stabilizing after suffering the worst economic crisis in decades, President Barack Obama said on Wednesday.

“When you look at the economy right now, I think it's safe to say we have stepped back from the brink, that there is some calm that didn't exist before,” Obama said at a fund-raiser for the Democratic National Committee.

Obama took credit for a large share of the turnaround, saying his young administration had accomplished as much or more in its first four months as any administration since Franklin Delano Roosevelt's in the 1930s.

The relatively upbeat comments were in sync with a rise in U.S. consumer confidence in May to its highest level in eight months, as more believe the worst of the downturn is over.

But though the economy is showing signs of being on firmer ground, Obama said there was still much work to be done to get the United States' fiscal house in order.

“We can't rest on our laurels because we've got a lot of work to do” in areas ranging from healthcare to education to curbing dependence on foreign oil, he said.

Major reforms in areas such as financial regulation are also needed to move the U.S. economy beyond a “cycle of bubble and bust,” Obama said.

“It's a not a matter of us maxing out our credit cards, overleveraging our banks and creating new bubbles that replace the housing bubble,” he told Hollywood celebrities such as Steven Spielberg and other donors who paid $30,400 a couple to attend a dinner where Obama spoke.

“It's rather creating an environment in which we can have slow, steady progress and a foundation for economic growth that is sustainable,” Obama said.

Obama spoke a short while later to a more raucous crowd which paid $1,000 to $2,500 to hear him and watch singer Jennifer Hudson and music group Earth, Wind and Fire perform.

The two speeches were expected to bring in about $3 million $4 million for the DNC. Pennsylvania Senator Arlen Specter, who recently joined the Democratic party after years as a Republican, also attended the dinner.

Recent data has suggested the economy is stabilizing after a number of turbulent months in which the U.S. unemployment rate has risen to 8.9%, 4 percentage points higher than at the start of the recession in December 2007.

But the economy is still losing hundreds of thousands of jobs per month and some analysts think the United States could be in for several years of high unemployment and weak growth, even after big job losses subside. (Reuters)