President Barack Obama in the Green Room of the White House with interim Chief of Staff Pete Rouse, right, and William Daley before the announcement that he was naming Daley as his new Chief of Staff, Jan. 6. (Official White House Photo by Pete Souza)



The president is surrounding himself with veterans of the Clinton administration. Chief of staff William Daley, economic overseer Gene Sperling and recently confirmed budget director Jacob Lew form an inner circle with a history of bipartisanship and experience in the art of the deal.

"Our mission has to be to accelerate hiring and accelerate growth," the president declared Friday at a window manufacturing plant in suburban Maryland.

It's a mission facing political and economic crosscurrents, underscored Friday by a mixed bag of an unemployment report and a relatively upbeat but cautionary assessment of the economy from Federal Reserve Chairman Ben Bernanke.

The Labor Department said unemployment dropped to 9.4 percent from 9.8 percent and private employers added a net total of 113,000 jobs last month. But the drop in unemployment was due partly to people who stopped looking for work.

Bernanke told the Senate Budget Committee that there's rising evidence that a self-sustaining recovery is taking hold. "Overall, the pace of economic recovery seems likely to be moderately stronger in 2011 than it was in 2010," he said.

Continued high unemployment and slow growth into 2012 would certainly haunt Obama's reelection campaign. But the ability to shape an economic policy is complicated by a divided Congress where Republicans are demanding deficit reductions while many Democrats seek more spending to spur the economy.

Obama has moved to have it both ways, and to appeal to Republicans and business leaders who find value in international trade deals. To that end, he is wielding an economic message centered on competitiveness that spends on education initiatives to retool the workforce, embraces trade and provides tax breaks to businesses.

At the same time, with a new chief of staff and a new director of the National Economic Council in place at the White House, Obama also is turning his focus toward tackling the deficit and debt.

"Everybody knows that the long-run fiscal situation facing the country is one that we've got to address, and the president's not afraid of that," White House economist Austan Goolsbee said. "You will see when the president releases his budget in the coming weeks that he's got a tough-minded approach."

With Daley, Sperling and Lew, Obama enters the second two years of his presidency counseled by Clinton era officials who have worked across party lines to cut economic deals. They recall a happier time, when unemployment was low, budgets were balanced and the economy was humming.

Sperling was a key player in the bipartisan negotiations in December that extended Bush era tax rates for all taxpayers, including the wealthy - a Republican priority - but also included Obama priorities such as an extension of a refundable earned income tax credit and a 2 percent, year-long payroll tax cut.

As director of the White House National Economic Council, Sperling will have a hand in shaping the course of nearly all of the administration's economic policies, including looming battles with Republican lawmakers on spending cuts and raising the debt ceiling.

"He's a public servant who has devoted his life to making this economy work - and making it work, specifically, for middle-class families," Obama said.

Daley, a member of the Chicago political family dynasty, brings his record as a banker and political insider to the White House. As Clinton's Commerce Secretary, he was a champion of the North American Free Trade Agreement - a pact that left a legacy of bitterness among some sectors of the Democratic Party.

Before joining the White House Daley has advocated a moderate path for Obama and is a board member of the centrist group Third Way.

On Friday, Obama also nominated Katharine G. Abraham to his Council of Economic Advisers and Heather Higginbottom as deputy director of the Office of Management and Budget. Those two posts require Senate confirmation. Obama also elevated economic adviser Jason Furman to assistant to the president for economic policy.

The changes set the stage for Obama's State of the Union speech later this month. Expected to emphasize economic themes, it will be a blueprint not only for governing but an initial marker of his reelection campaign.

But first, the president is engaging in some high-profile outreach to the business community. On Tuesday, he will go to Schenectady, N.Y., to tour a future GE battery manufacturing plant with GE CEO Jeffrey Immelt. In four weeks, he will cross Lafayette Park in front of the White House to address the U.S. Chamber of Commerce, a trade group that has battled his top policy initiatives on health care and financial regulation.

But the Chamber can also be a potential partner for Obama, supporting greater spending on infrastructure and helping push trade deals in Congress.

The president also has been prodding businesses to shake loose untapped corporate cash and create more jobs.

At the Thompson Creek Window Company in Landover, Md., on Friday, Obama took note of the recent tax deal that allows businesses to expense 100 percent of their investments in 2011. The president made a direct appeal to other companies, telling them now is the time to capitalize on that opportunity.

"If you are planning or thinking about making investments sometime in the future, make those investments now, and you're going to make money," Obama said.

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Associated Press writers Julie Pace and Darlene Superville contributed to this report.