U.S. budget chief says signs of economic free-fall over

The Obama administration's budget chief said on Sunday there are signs that the free-fall in the economy seems to have halted.

There are some glimmers of sun shining through the trees, but we're not out of the woods yet, White House budget director Peter Orszag said on CNN's State of the Union.

U.S. economic data have shown evidence that the recession's worst phase may be over, with April consumer prices unchanged and industrial output declining at a slower pace than in March.

Federal Reserve Chairman Ben Bernanke has also suggested that the recession should end this year as long as there is no reemergence of the credit crunch.

Orszag said as the economy starts to recover the deficit will come down quickly. The White House recently forecast a higher budget deficit of $1.84 trillion, or 12.9 percent of gross domestic product, for the fiscal year ending September 30.

The economy remains weak (so) we will continue to have these elevated deficits so, again, we're going to have more to say about this in a couple of months, Orszag said.

(Reporting by Rachelle Younglai; Editing by Eric Walsh.)