Economy on recovery track despite slow pace: Bernanke
Published on Wed, May 06, 2009 at 08:38 | Source : CNBC-TV18
Updated at Wed, May 06, 2009 at 15:45
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Economy on recovery track despite slow pace: Bernanke
Federal Reserve Chairman Ben Bernanke told Congress yesterday that the US economy is on track for a recovery, but it will be slow. He said unemployment will continue to rise as businesses remain cautious about hiring. Bernanke was testifying to the US Congress Joint Economic Committee.
US Federal Reserve Chairman Ben Bernanke told Congress yesterday that the US economy is on track for a recovery, but it will be slow. He said unemployment will continue to rise as businesses remain cautious about hiring. Bernanke was testifying to the US Congress Joint Economic Committee.
"Even after the recovery gets underway, the rate of growth of real economic activity is likely to remain below its longer run potential for a while, implying that the current slack in resource utilisation will increase further. We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly. In particular, businesses are to be cautious about hiring implying the unemployment rate will remain high for a time even after growth presumes," Bernanke added.
The Fed Chairman expects inventory liquidation to slow over the next few quarters. "We continue to expect economic activity to bottom out, then to turn up later this year. Key elements of this forecast are assessments that the housing market is beginning to stabilise and that the sharp inventory liquidation that has been in progress will slow over the next few quarters."
