A top advisor to U.S. President Barack Obama said the American economy will continue to shrink over the next few months, while unemployment rises.
The U.S. economy shrank at a 6.1 percent annual pace in the first three months of this year. The head of the Council of Economic Advisors, Christina Romer, said the economy will continue to decline for the next few months, but it will shrink at a slower pace.
She pointed to signs that the economic decline is moderating, including slight improvements in the housing market, and a recovery of battered stock prices.
Romer told a congressional hearing Thursday that the U.S. economy will "level out" in the second half of 2009 and then begin to recover. Romer cautioned that unemployment will continue to rise for the next few months.
She spoke after a government report Thursday showed the number of Americans collecting unemployment assistance for more than one week grew to a record high of nearly 6.3 million last week.
Other data showed U.S. consumer spending falling in March as consumers cut spending by two-tenths of a percent.
Economists track consumer spending closely because consumer demand drives two-thirds of U.S. economic activity.
Some information for this report was provided by AP and Reuters.