Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Bernanke: Need more time to recoup job losses

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney.com) -- Fed chairman Ben Bernanke said that private sector demand will be "sufficient" to spur a moderate economic recovery in coming months, but he added that more time is needed to recover job losses.

"A recovery in economic activity appears to have begun in the second half of last year," Bernanke told the Joint Economic Committee.

Bernanke's speech was mostly upbeat, noting all the different areas where the economy has picked up. He pointed to higher GDP rates, increasing auto sales and a strengthening financial system as catalysts for the Federal Reserve to wind down programs that were propping up those sectors.

"Going forward, consumer spending should be aided by a gradual pickup in jobs and earnings, the recovery in household wealth from recent lows, and some improvement in credit availability," Bernanke said.

He cautioned that the unemployment rate and the housing market remain areas of concern.

"I am particularly concerned about the fact that, in March, 44% of the unemployed had been without a job for six months or more," Bernanke said. "Long periods without work erode individuals' skills and hurt future employment prospects. Younger workers may be particularly adversely affected if a weak labor market prevents them from finding a first job or from gaining important work experience."

Bernanke also spoke about the need for policymakers to start tackling the growing federal deficit, to maintain "the confidence of the public and financial markets."

Sen. Sam Brownback, R-Kansas, asked Bernanke about whether the nation could face problems like Greece or Ireland, with countries doubting the U.S.'s ability to control its debt.

Bernanke stressed that the United States has a more "diversified," economy, but acknowledged that, "at some point, the markets will make a judgment about our political will to achieve longer term stability." To top of page

Index Last Change % Change
Dow 16,204.97 -211.61 -1.29%
Nasdaq 4,363.14 -146.41 -3.25%
S&P 500 1,880.05 -35.40 -1.85%
Treasuries 1.85 -0.02 -0.86%
Data as of 8:32am ET
Company Price Change % Change
Bank of America Corp... 12.95 -0.30 -2.26%
Facebook Inc 104.07 -6.42 -5.81%
Freeport-McMoRan Inc... 5.68 -0.04 -0.70%
Microsoft Corp 50.16 -1.84 -3.54%
General Electric Co 28.54 -0.64 -2.19%
Data as of Feb 5
Sponsors

Sections

Anheuser-Busch has been the exclusive beer advertiser featured during the Super Bowl since 1975, and it's spent more on Super Bowl advertising than any other company for the last five years in a row. More

The economy is better than it was, but not even President Obama is ready to declare it's booming. More

Laurie Segall sits down with Foursquare's new CEO Jeff Glueck to discuss the company's latest round of funding at a lower valuation, and their hybrid consumer/enterprise business model. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

Portland, Oregon, is often described as the last affordable cool city on the West Coast. But as more people move to the city, it's becoming increasingly unaffordable. More