Obama Tempers Optimism With Reality on Economy

Nearing the symbolic 100-day mark in office, President Obama declared Tuesday the economy is moving in the right direction but also cautioned that the country is not in the clear yet.

In a speech at Georgetown University, Obama delivered "prose, not poetry," aimed at crystallizing why this recession differed from previous ones.

Obama blamed greed and irresponsibility, not a normal downturn in the business cycle, for the current recession, and defended his administration's aggressive actions to tackle it.

"There is no doubt that times are still tough," Obama said. "But from where we stand," he said, "for the very first time, we are beginning to see glimmers of hope. And beyond that, way off in the distance, we can see a vision of an America's future that is far different than our troubled economic past."

Obama's message was enveloped in contradictory signals Tuesday about the economy's health, but also buttressed by a contention by Federal Reserve Chairman Ben Bernanke that the recession may be bottoming out.

Retail sales fell unexpectedly in March, decreasing by 1.1 percent. At the same time, wholesale prices dropped sharply as the cost of gasoline and other energy plummeted, fresh evidence that inflation appears to pose little threat to the economy.

In a speech prepared for students and faculty at Morehouse College in Atlanta, Bernanke, like Obama, said there have been flickering signs of improvement, citing recent data on home and auto sales, home building and consumer spending.

But the broader message that a full turnaround might be a long time coming may not be welcome to a weary U.S. public.

Obama said a complete recovery depends on two things: building a new foundation for the U.S. economy and making changes in the political landscape. And he was avoiding any significant policy announcements, endeavoring instead to paint a broad picture of what his administration has already done to right the situation.

Obama said the rules governing the financial system must be brought into the Digital Age and that the economy must be transformed from one less dependent on a risk-obsessed financial sector and more on clean energy, good education and health care costs brought under control.

"We cannot rebuild this economy on the same pile of sand," he said, invoking a Biblical reference to Jesus' Sermon on the Mount. "We must build our house upon a rock. We must lay a new foundation for growth and prosperity a foundation that will move us from an era of borrow and spend to one where we save and invest, where we consume less at home and send more exports abroad."

Obama also said the problem is exacerbated by politicians with an outsized interest in scoring points and an impatient media.

"When a crisis hits," he said, "there's all too often a lurch from shock to trance, with everyone responding to the tempest of the moment until the furor has died away and the media coverage has moved on, instead of confronting the major challenges that will shape our future in a sustained and focused way."

"This can't be one of those times," Obama said.

The Associated Press contributed to this report.