WASHINGTON, USA (AP) — His presidency tied to the fate of the US economy, Barack Obama is revamping his economic policy team and signaling cooperation to ascendant Republicans and the business community at a pivotal moment in the nation’s recovery and Washington politics.

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 is 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 per cent from 9.8 per cent 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 is 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 re-election 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 centred 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 counselled by Clinton era officials who have worked across party lines to reach 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 two per cent, 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.

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 also an initial marker of his re-election campaign.