- Title: USA: Federal Reserve Chairman Ben Bernanke says economy still needs Fed help
- Date: 4th February 2011
- Summary: WASHINGTON, D.C., UNITED STATES (FEBRUARY 3, 2011) (REUTERS) WIDE OF APPLAUSE AS U.S. FEDERAL RESERVE CHAIRMAN BEN BERNANKE WALKS UP TO MICROPHONE (SOUNDBITE) (English) U.S. FEDERAL RESERVE CHAIRMAN, BEN BERNANKE, SAYING: "Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain persistently below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate from the Congress to foster maximum employment and price stability." MEMBERS IN AUDIENCE LISTENING WIDE OF BERNANKE SPEAKING (SOUNDBITE) (English) U.S. FEDERAL RESERVE CHAIRMAN, BEN BERNANKE, SAYING: "Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established." WIDE OF BERNANKE SPEAKING AUDIENCE MEMBER LOOKING ON (SOUNDBITE) (English) U.S. FEDERAL RESERVE CHAIRMAN, BEN BERNANKE, SAYING: "Nevertheless, overall inflation remains quite low: Over the 12 months ending in December, prices for all the goods and services purchased by households increased by only 1.2 percent, down from 2.4 percent over the prior 12 months. WIDE OF AUDIENCE (SOUNDBITE) (English) U.S. FEDERAL RESERVE CHAIRMAN, BEN BERNANKE, SAYING: "The economy has to grow about 2.5 percent in real terms just to accommodate people coming into the labor force, so in order to keep the unemployment rate constant, we need about 2.5 percent growth." WIDE OF BERNANKE SPEAKING
- Embargoed: 19th February 2011 12:00
- Keywords:
- Location: Usa, Usa
- Country: USA
- Topics: Economic News
- Reuters ID: LVAA98TCIO1XSMJFC1WON96WNUT0
- Story Text: The U.S. economic recovery still needs help from the Federal Reserve despite signs of improvement, the central bank's chairman Ben Bernanke said on Thursday (February 3).
The Fed chairman provided a modestly more rosy outlook for the world's largest economy than he has done in recent appearances, citing gains in household spending, improved confidence, and stepped up bank lending as signs 2011 may bring stronger growth than 2010.
"Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate," he said in an appearance at the National Press Club in Washington.
The event marks the second time Bernanke has spoken at the Press Club and taken questions from reporters afterwards. He said the central bank is considering holding more regular press conferences as part of improving its communications with the public.
His comments on the economy suggest a Fed that believes it has plenty of time to let its policies boost growth and pull down a high unemployment rate before it needs to worry about tightening financial conditions to keep any inflation in check.
The hard hit job market shows some grounds for optimism, but modest growth and cautious hiring suggest that it will be several years before the jobless rate returns to a more normal level, Bernanke said.
"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," he said.
Some analysts worry the Fed is underplaying gains in the recovery and is turning a blind eye to inflation pressures that may be building as evidenced by rising commodity prices around the world.
Bernanke played down worries that recent commodity price rises pose an inflation threat.
"Overall inflation remains quite low," he said.
Bernanke is due to appear before the House of Representatives budget panel to discuss fiscal issues next week. - Copyright Holder: REUTERS
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