June 7, 2011 / 1:48 AM / 8 years ago

UPDATE 3-Top White House economist Goolsbee to step down

* Departure comes as new signs of economic weakness emerge

* Goolsbee is one of Obama’s closest aides

* Will return to teaching, advising on re-election bid (Adds reaction, details)

By Alister Bull and Caren Bohan

WASHINGTON, June 6 (Reuters) - Top White House economist Austan Goolsbee said on Monday he was stepping down, marking the exit of one of President Barack Obama’s top aides at a time when new signs of weakness have emerged in the U.S. economy.

Less than a year after he was named chairman of the White House Council of Economic Advisers, Goolsbee plans to return to his teaching job at the University of Chicago, the Obama administration said in a statement. He will be back in Chicago in time for the start of the next school year.

Goolsbee’s departure leaves Treasury Secretary Timothy Geithner as the sole remaining senior member of Obama’s original economic team, as the president is under pressure to persuade Americans that he has a plan to boost growth.

Obama could be vulnerable on the economy as he fights for re-election next year and must convince voters his policies will succeed. Analysts say that recent disappointing data has called the vigor of the economic recovery into question.

Goolsbee has been one of the administration’s more visible spokesmen on the economy. Lately he has emphasized his view that the recovery remains solidly on track, despite a report on Friday showing tepid jobs growth and a rise in the unemployment rate in May to 9.1 percent from 9 percent in April.

“He has helped steer our country out of the worst economic crisis since the Great Depression, and although there is still much work ahead, his insights and counsel have helped lead us toward an economy that is growing and creating millions of jobs,” Obama said in a statement.

Goolsbee, who advised Obama’s campaign for the U.S. Senate in 2004 and his 2008 presidential campaign, was seen as one of the administration’s best communicators and his sudden departure will clearly be a loss for the White House.

Republicans, who see voters’ worries over the economy as their best chance of defeating Obama next year, seized on the news.

“With anemic job growth, plunging economic confidence, and no real plan to rein in the deficit, this departure is just the latest sign that the president has no answers for Americans concerned about the economy,” said Brendan Buck, spokesman for Republican House of Representatives Speaker John Boehner.

In addition to the gloomy May jobs report, other data including disappointing reports on housing and manufacturing have suggested the recovery was losing momentum.

Republicans are also battling with Obama’s Democrats over curbing the country’s long-term deficit and have demanded deep spending cuts in return for agreeing to raise the $14.3 trillion U.S. debt limit before an Aug. 2 deadline.

At the beginning of this year, Goolsbee warned that a failure by Congress to raise the nation’s borrowing limit could be “catastrophic” for the economy, a line the White House has repeated in the months since then as it negotiates with Republicans over legislation to lift the debt ceiling.

Senior administration officials, playing down the reasons for his exit, said Goolsbee was departing to preserve his post as a tenured professor in Chicago, which could have expired if he had stayed much longer in Washington.

Before being promoted to CEA chairman last September, Goolsbee served as one of the three members of the Council of Economic Advisers, whose main function is to provide economic forecasts for the president.

He also was a staff economist to the President’s Economic Recovery Advisory Board, an outside panel of economic advisers led by former Federal Reserve Chairman Paul Volcker.

Larry Summers, former director of the White House National Economic Council, stepped down at the end of last year to return to his teaching job at Harvard University.

Christina Romer, his predecessor as CEA chair, left last August, also to return to academia, and Peter Orszag resigned as White House budget director last July.

From Chicago, where he will teach at the Graduate School of Business, Goolsbee will also serve as an outside adviser to Obama’s 2012 re-election campaign, according to an administration official. (Additional reporting by Joanne Allen, Editing by Eric Walsh)

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