WASHINGTON (CNN) – One of President Barack Obama's top economic advisers predicted Sunday that the economic downturn will continue for the next several months despite some signs that a recovery may take root by the end of 2009.
"I suspect that the economy will continue to decline for some time to come," National Economic Council Director Larry Summers said. But "I do think if you look at the consensus of professional forecasters, that consensus suggests a somewhat better performance towards the end of the year."
The former Clinton administration treasury secretary, speaking on the show "Fox News Sunday," noted that were several indications that the economy was starting to turn the corner.
"Six or eight weeks ago, there were no positive statistics to be found anywhere. The economy felt like it was falling vertically," he said.
"Today, the picture is much more mixed. There are some negative indicators, to be sure. (But) there are also some positive indicators."
Among other things, Summers highlighted a recent spike in mortgage refinancing, as well as a substantial reduction in credit spreads for consumers.
Summers warned, however, that it will take at least half a year for the administration's recovery program to start impacting the economy in any significant manner.
"Experience suggests that ... even strong plans take time, take six months or more, to have their impact on the economy," he said.
He also indicated that rising unemployment would continue to be a nationwide problem.
"If you look at the pattern in the economy, it was clear that there were going to be sharp declines in employment for quite some time this year," Summers said.
Turning to the question of the struggling U.S. auto industry, Summers expressed hope that Chrysler might be able to avoid what many analysts now believe is an imminent bankruptcy. The company is facing a Thursday deadline to come up with a viability plan that includes a merger with European automaker Fiat.
"We're hopeful that the negotiations (with Fiat), which have been proceeding with great energy, are going to conclude successfully. It's in everybody's interest, we believe, to see these negotiations succeed," he said.
At the same time, however, Summers was careful to minimize the negative fallout of a possible Chapter 11 bankruptcy filing for Chrysler.
"In certain circumstances, a bankruptcy ... is really about change in legal form that actually protects the company and enables it to function more effectively," he said.