"I want to begin with some plain talk," Obama said, during a visit to the US Department of Transportation.
"The economy's performance in the last quarter of 2008 was the worst in over 25 years, and frankly, the first quarter of this year holds out little promise for better returns."
Obama spoke after days of punishing losses on global stock markets, and after government data last week showed a 6.2 per cent US economic contraction in the fourth quarter of last year, the worst for a quarter century.
"From Wall Street to Main Street, to kitchen tables all across America, our economic challenge is clear," Obama said.
"Now it is up to us to meet it.
"One of the challenges is to jumpstart lending so businesses and families can finance the purchases of everything from inventory and payroll to a home, a car, or a college education. We have to jump-start the credit markets and get private lending going again."