Obama says US economy 'not doing fine' after criticism

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US President Barack Obama admitted on Friday that the US economy is 'not doing fine' after he was criticized by opposition Republicans for saying at a press conference that the private sector is 'doing fine'.

"It is absolutely clear that the economy is not doing fine, that's the reason why I had a press conference," Obama said.

"The economy is not doing fine. There are too many people out of work, the housing market is still weak and too many homes are underwater."

His earlier comment saying the private sector is 'doing fine' drew instant criticism from Republicans who said it showed a lack of understanding of the nation's economic woes. GOP presidential candidate Mitt Romney responded, "Is he really that out of touch?"

He said that while there had been some 'good momentum' in the private sector, public sector growth lagged behind, making it imperative that Congress act on his proposals to boost state and local government jobs.

"I cannot give you a good reason why Congress would not act on these items other than politics," Obama said after being asked to respond to the Republican criticism.

The president made similar assertions in a White House news conference Friday morning, saying that businesses had created 4.3 million jobs during the past 27 months and the primary problem with employment is that state and local governments had been forced to cut jobs in the private sector.

Republicans pounced.

Romney, holding a campaign event in Council Bluffs, Iowa, said Obama's remark was "defining what it means to be detached and out of touch with the American people." He said the comment "is going to go down in history as an extraordinary miscalculation and misunderstanding."

But while 'doing fine' is in the eye of the beholder, Obama was correct that the job picture in the private sector is brighter than in the public sector. Since the recession officially ended in June 2009, private companies have added 3.1 million jobs.

Largely because of cuts at the state and local level, governments have slashed 601,000 jobs over the same period. According to the government, corporate profits have risen 58 percent since mid-2009.

Even so, by historical standards, private job gains in the last three months have been weak after such a deep recession.