White House Adviser: Economy 'Back From the Abyss'

President Obama's top economic adviser said Friday that the caving of the U.S. economy stopped just short of a death rattle and is on its way back to health.

"We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss," Larry Summers told the Peterson Institute for International Economics, a Washington think tank.

The progress report Summers delivered on the administration's efforts to shore up the economy cited everything from an increase in disposable income to the content of Google searches as evidence of a silver lining.

"As of May, the tax cuts, fiscal support for state and local government and family assistance programs in the Recovery Act have boosted disposable income by nearly 2 percent. ... Hits (on Google) for 'economic depression' have returned to baseline levels," said the director of the White House National Economic Council.

But the unemployment rate continues to be a thorn in the side of economic recovery.

Obama frequently admits job loss isn't likely to get better any time soon. Obama has even warned the public that some of the jobs that were lost may never return.

Like his boss, Summers said job loss will likely get worse before it gets better.

"It is true that unemployment is substantially higher and job loss has been greater than most observers predicted last winter and unemployment is likely to rise in the coming months. This is obviously a major area of concern," he said.

But even as the deficit crests the $1 trillion mark, Summers said the president's costly push for health care reform is a must to ensure a full economic recovery.

"Without comprehensive health reform, there is little prospect of convincing markets that the long-term growth in federal debt is under control or of convincing businesses that the United States is the most competitive place for them to invest," he said.

The administration faces hurdles in its health care push. Just Thursday, Congressional Budget Office Director Douglas Elmendorf said the health care legislation on Capitol Hill does not yet include the "fundamental changes" needed to reduce federal health spending.