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 21,394.76 -2.53 -0.01%
Nasdaq 6,265.25 28.56 0.46%
S&P 500 2,438.30 3.80 0.16%
Treasuries 2.14 -0.01 -0.42%
Data as of 8:48am ET
Company Price Change % Change
Advanced Micro Devic... 14.17 -0.21 -1.46%
Bank of America Corp... 22.82 -0.11 -0.48%
Micron Technology In... 31.73 -0.16 -0.50%
Ford Motor Co 11.04 -0.09 -0.81%
Oracle Corp 50.95 0.65 1.29%
Data as of Jun 23
Sponsors

Sections

The Senate GOP health bill would severely cut back federal support for Medicaid, which covers 1 in 5 Americans. States would have trouble filling the gap, likely leading them to cut eligibility, funding and provider rates. More

The Justice Department is fighting back against a 2016 court ruling that determined American companies don't have to hand over customer data to U.S. police if it's stored on computers in another country. More

The average guest at a wedding last year spent $888 per wedding, according to a study from the Knot. For those in the wedding party, the price of being a stand-up friend was over $1,000. More