Washington : US President Barack Obama on Wednesday dismissed fears of a plunge into a "double-dip" recession and warned against "panic" over dismal economic data that is beginning to cloud his reelection hopes.

In a news conference with German Chancellor Angela Merkel, Obama said the recovery may be slow and sought to assure "skittish and nervous" investors and voters that better times lay ahead. "I am not concerned about a double-dip recession," Obama said, empathising with people who were frustrated that growth had not been unleashed more quickly.

"I'm concerned that the recovery is not producing jobs as quickly as I wanted it to happen," he said, adding there was "enormous work to do" to strengthen the recovery after the worst recession in decades. As Republicans fire up their race for the party White House nomination and lambast Obama's economic policies as a failure, the president recalled that the world came close to a "complete disaster" back in 2009-2010.

"Recovering from that kind of body-blow takes time," Obama said, admitting that in recent weeks the economy had faced strong "headwinds." "Recovery is going to be uneven. There are going to be times where we are making progress but people are still skittish and nervous and the markets get skittish and nervous."

"Our task is not to panic, not to overreact rather it is to make sure that we've got a plan, a path forward," he said, noting the need to tend to structural issues and fundamentals that would promote growth and a sound business environment.

Obama spoke at length about the state of the economy after the unemployment rate spiked to 9.1 per cent last week, as other data showed a moribund housing market and slowed manufacturing   growth.

Numerous private sector economists have lowered estimates for second quarter GDP growth to under 2.0 per cent, down from 3.0 per cent growth rate forecasts for the year thatwould have conjured up hundreds of thousands of jobs. The dismaying evidence that the recovery may be stalling has offered a sudden opening to Republicans, especially those running nascent presidential campaigns, who know many Americans are yet to feel evidence of a recovery.

Mitt Romney, the putative Republican frontrunner for the 2012 election slammed Obama for saying the jobs data was a "bump in the road" and issued an indictment of administration policies he said had "failed America."  The attacks appear based on solid political logic: In a new Washington Post/ABC poll released on Tuesday six in 10 Americans gave Obama negative marks on the economy.

More crucially, two thirds of independents voting block which often decides US presidential elections, disapproved of president's economic policies.