Nightly News   |  July 30, 2010

Obama plugs economic jump-start

President Obama traveled to Michigan Friday to say his decision to bail out the U.S. auto industry was the right one and punctuated his point with a turn behind the wheel in a new Chevy Volt. NBC's White House Correspondent Savannah Guthrie reports.

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CURRY: Good evening. I'm Ann Curry in for Brian Williams , who's on assignment in New Orleans .

ANN CURRY, anchor: And tonight the economy is front and center. As President Obama spent the day in Michigan talking about his decision to bail out the US auto industry and pointing to GM as an economic comeback story, we got a new measure of just how the economy is doing overall. The gross domestic product, which is the broadest measure of economic growth , weakened in the second quarter to 2.4 percent. And in more unsettling news today, growth figures from 2007 through 2009 revised downwards, which shows that the economic meltdown was even worse than previously thought. NBC White House correspondent Savannah Guthrie now joins us with the White House 's take on where all this puts us. Savannah , good evening.

SAVANNAH GUTHRIE reporting: Good evening to you, Ann. Well, one senior White House official told me today you got to look at the big picture. Eighteen months ago the economy was falling off a cliff. Today it is growing, but even officials here acknowledge that this recovery is running into some headwinds. The president today in Michigan , taking a short spin in Chevy 's new hybrid electric vehicle.

President BARACK OBAMA: ...pretty smooth.

GUTHRIE: In the heart of car country, Mr. Obama hoped to highlight a turnaround story, an American auto industry resurrected from the dead.

Pres. OBAMA: Today, for the first time since 2004 , all three US automakers are operating at a profit. First time in six years.

GUTHRIE: The auto industry is poised to pay back more than two-thirds of its $85 billion government bailout, and the administration says its rescue saved one million jobs. But the latest government figures out today show the larger economy in a stall, growing just 2.4 percent last quarter, not near enough to make a dent in unemployment.

Ms. DIANE SWONK (Mesirow Financial Chief Economist): Given the depth of the recession, the extraordinary losses we endured, we should be seeing growth two to three times that of what we're actually seeing in the US economy .

GUTHRIE: Part of the problem, consumers, normally two-thirds of the economy, are slowing their spending again. And though business investments have jumped 17 percent, many companies, even those now enjoying profits, aren't spending on new full-time workers, instead hiring temps or wringing more hours out of the employees they have.

Mr. LAKSHMAN ACHUTHAN (Economic Cycle Research Institute): Fewer people are making a lot more stuff, and the companies are keeping that cash because they remain scared.

GUTHRIE: In Detroit today, a city with 30 percent unemployment, the president said things are headed in the right direction.

Pres. OBAMA: We are back on our feet! We are on the move!

GUTHRIE: While many economists will tell you unemployment is likely to hit double digits again before coming down, officials here do think that that European debt crisis which had so shook the fragile economic recovery has largely passed and worked its way through the system. They don't think we're in for a double-dip recession, Ann.

CURRY: All right, Savannah Guthrie this evening. Thank you so much , Savannah .