Obama says U.S. still under strain

By Alister Bull

WASHINGTON (Reuters) - President Barack Obama said on Sunday that the U.S. economy remained under strain and his top economic adviser tempered hopes for a speedy recovery that have driven the stock market to successive gains.

"We're not out of the woods. This is still a difficult time for the economy. Credit is still contracted," Obama told a news conference in Port of Spain, Trinidad and Tobago, where he was attending the Fifth Summit of the Americas.

Data continue to show the country's severe recession is inflicting severe pain, with over 5 million jobs lost since it began in late 2007. But there have been scattered indications that the pace of economic decline is slowing.

Global stocks closed Friday higher for a sixth straight week and oil prices rose above $50 a barrel on the upbeat mood of consumers and improved quarterly earnings reported by some of the country's biggest banks.

"We've seen some more mixed statistics after a period when there was no positive statistics to be found," White House Director of the National Economic Council Lawrence Summers told NBC's "Meet the Press."

"But it is a long road and it is going to take time. It is going to take creating jobs again ... it is going to take supporting the financial system," he said.

STRESS TESTS

A key challenge for the U.S. economy is to restore confidence that its banks are now sufficiently capitalised after huge losses from the collapse of the housing market.