Obama: U.S. economy still facing challenges

By Jim Kuhnhenn

Associated Press

Published: Friday, June 3 2011 12:00 a.m. MDT

"I thought my future was going to be saying 'do you want fries with that,' " he said.

Before addressing the auto workers Obama made time for some retail politics in this battleground state, stopping at Rudy's Hot Dog, a Toledo institution where the president got two of their famous chili dogs with mustard, onion and cheese, insisted on paying himself, and shook hands all around. Eager to make the case that Chrysler's success also helped the broader Toledo economy, the president later stopped by a hardware store where he bought gardening gloves for Michelle Obama.

The president ignored a shouted question from a reporter about the jobs numbers.

The auto industry resurgence is one of the few positive notes in an economy that had been growing moderately but has now hit a listless patch. Unemployment had been dropping from a high of 10.1 percent in October of 2009. But it now has experienced back-to-back increases.

The industry is also a major employer in presidential battleground states like Michigan, Ohio, Indiana and Missouri, all of them important for Obama's re-election prospects in 2012. The industry recovery gives Obama the opportunity to distinguish himself from Republicans who had criticized the government's intervention

Among them was Republican presidential candidate Mitt Romney, who had called for Chrysler and GM to go through bankruptcy without government assistance. Romney on Friday defended his position. "The right process for an enterprise in trouble is not to be given money by the taxpayers in a bailout," he told CBS's "The Early Show."

Associated Press writer John Seewer contributed to this report.

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