WASHINGTON - President Barack Obama will give Americans a progress report Tuesday on his steps to rescue the recession-hit economy, telling them there are signs of recovery but by no means are we out of the woods just yet.

I want to update you on the progress we've made, and be honest about the pitfalls that may lie ahead, Obama will say in what the White House billed as a major speech on the economy.

But from where we stand, for the very first time, we are beginning to see glimmers of hope, Obama said, according to excerpts of the speech he is due to deliver at Georgetown University in Washington at 11.35 a.m..

Obama outlined the multitude of steps his administration has taken since he was sworn into office on January 20 after inheriting the worst economic crisis in decades from his predecessor George W. Bush.

Obama said his $787 billion economic recovery package, steps to recapitalize banks, unfreeze credit markets, stabilize the housing market and shore up the ailing U.S. auto industry were all necessary pieces of the recovery puzzle.

And taken together, these actions are starting to generate signs of economic progress, he said.

Earlier Tuesday, White House economic adviser Christina Romer said the U.S. economy was still sick and she forecast continued job losses and a falling gross domestic product for several more months.

The U.S. economy lost 663,000 jobs last month, pushing the unemployment rate to a 25-year high of 8.5 percent. The economy shrank at an annual rate of 6.3 percent in the last quarter of 2008, the steepest decline since the first quarter of 2008.

There was more gloomy economic news Tuesday, with new data showing that U.S. retail sales fell 1.1 percent after two months of increases. Producer prices also fell unexpectedly.

The data tamped down a surge in cautious optimism among some investors, fueled by positive housing and consumer spending figures, that the 16-month-old economic downturn was close to reaching a bottom.

Obama said 2009 would continue to be a difficult year for the U.S. economy, warning that Americans would continue to see more job losses, more house home foreclosures and more pain before it ends.

There is no doubt that times are still tough. By no means are we out of the woods yet, he said.

Barack obama George W. Bush