Obama sees signs of economic progress

President Barack Obama said on Friday that he was seeing glimmers of hope across the recession-hit U.S. economy but that it still remained under severe strain.

We've still got a lot of work to do, Obama told reporters after meeting top economic policymakers and financial regulators at the White House. We're starting to see progress.

Obama spoke a day after encouraging data on U.S. trade and jobless claims helped Wall Street stocks end higher, while White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of freefall in months as stimulus and rescue efforts took effect.

Obama stopped short of declaring that the recession was bottoming out, saying instead that his administration was remaining cautious in its forecasts.

But he offered a somewhat more upbeat tone than he has recently on the state of the economy, which is locked in its worst crisis in decades. What we're starting to see is glimmers of hope across the economy, he said.

Over the next several weeks, you'll be seeing additional actions by the administration, he added but gave no details.

Obama made no mention of stress tests being conducted at 19 major U.S. banks.

The White House had said he would receive a status report on those appraisals at Friday's meeting. Attempting to assess banks' capital needs, the government is testing how they would fare under more adverse economic conditions than are expected.

Obama did, however, voice confidence that his administration was dealing with problems in both the banking system as well as non-bank financial institutions widely seen as a sector that escaped adequate regulatory scrutiny before the latest crisis.

His comments followed a briefing by Treasury Secretary Timothy Geithner, Federal Reserve Board Chairman Ben Bernanke, Federal Deposit Insurance Corp Chairman Sheila Bair, top White House economic adviser Larry Summers, Securities and Exchange Commission chair Mary Shapiro and U.S. Comptroller of the Currency John Dugan.

Obama cited improvement in small business financing and what he called a very significant pickup in mortgage refinancing needed to stabilize the troubled housing market.

But he added, The economy is still under severe stress.

(Editing by Sandra Maler)