Obama to meet with economic team amid gloomy news

U.S. President-elect Barack Obama speaks as Vice President-elect Joe Biden (L) looks on, during a news conference where he introduced Nobel physics laureate Steven Chu as energy secretary and Lisa Jackson, chief of staff for New Jersey's governor, to run the EPA, in Chicago, December 15, 2008.

CHICAGO (Reuters) - President-elect Barack Obama will meet with members of his economic team on Tuesday amid more gloomy financial news and expectations the Federal Reserve was set to cut interest rates even further.

A transition aide said Obama has been consulting with the advisers since naming his economic team in November, but the meeting in Chicago will physically bring them together.

Talks were likely to focus on Obama's economic recovery plan, the budget and other financial issues.

The meeting was to take place after a news conference at which Obama was expected to announce his pick for education secretary.

Though Obama has been praised for quickly naming his economic officials, he has offered few specifics on a massive economic recovery plan that he said would create 2.5 million jobs and revitalize the nation.

Growing financial problems in the United States and around the world make shoring up the economy a daunting task when Obama takes office on January 20.

U.S. consumer prices plummeted again during November and construction starts on new homes slumped to a record low as the recession-hit economy steadily lost momentum.

The latest government reports came as the Federal Reserve was expected to respond to the worst financial crisis in 80 years by cutting its benchmark rate by at least half a point to 0.5 percent -- its lowest in more than half a century.

In Europe, manufacturing and services activity in the euro single currency area sank to new lows in December while in Japan, where rates are already at an ultra-low 0.3 percent, the finance minister urged the central bank to also take unorthodox steps to ease a funding crunch.

In addition to Obama and Vice President-elect Joe Biden, the meeting will include Secretary of Treasury-designate Timothy Geithner, National Economic Council Director-designate Lawrence Summers and Office of Management and Budget Director-designate Peter Orszag.

Also included in the meeting will be Christina Romer, appointed to run the Council of Economic Advisors; Domestic Policy Council Director-designate Melody Barnes; Carol Browner who will coordinate energy and climate change policy and former Federal Reserve Chairman Paul Volcker, whom Obama has appointed to chair the President's Economic Recovery Advisory Board.

(Editing by Doina Chiacu)