Published: Thursday, 22 Oct 2009 | 10:54 AM ET

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A top White House adviser said Thursday that the U.S. economy was on the mend but unemployment would remain high for a while and policies designed to stimulate growth must be kept in place.

CNBC.com Council of Economic Advisers Chair Christina Romer

"A recession that showed no signs of ending last January appears to be firmly entering the recovery phase," Christina Romer, chairwoman of the White House Council of Economic Advisers, said in remarks prepared for delivery to the congressional Joint Economic Committee.

However, she warned that this anticipated return to growth in the second half of this year and next would be slow to lower the unemployment rate, which already has reached 9.8 percent and is forecast by many to push above 10 percent in 2010.

"Excessive moves toward fiscal policy tightening could lead to a return to output decline and a reacceleration of job losses. The current policies that have generated a dramatic turnaround of the economy need to be seen through to their completion," she said.

This warning repeats a regular caution from the White House not to prematurely end government aid for growth, although she acknowledged that the price tag for that action had added to the country's deep deficit and rising public debt.

"Such long-term deficits are unacceptable and need to be dealt with. Over the long run, sustained deficits crowd out private investment and reduce long-run growth," she said, adding that passing President Barack Obama's ambitious national health care overhaul would help to achieve this goal.

In addition to a $787 billion emergency government spending bill last year, the U.S. Federal Reserve has cut interest rates to almost zero and pumped over $1 trillion of cash into credit markets to prevent them seizing up during the financial crisis last year.

Romer said some people feared that this massive monetary stimulus could cause inflation, but dismissed this threat as "unwarranted" in the face of lingering economic slack and emphasized that, if anything, the risk to inflation was that it fall too low rather than rise too high.

"Measures of expected inflation ... all show that expectations of inflation remain subdued," she said.

"Indeed, it appears that the major reason that actual and expected inflation have not fallen further is that the Federal Reserve's record of inflation control over the past quarter century has kept inflation expectations well anchored," she said.

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