Federal Reserve Chairman Ben Bernanke said today the worst US recession since the Great Depression was probably over but warned the recovery would be slow and take time to create new jobs.
"Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time," Mr Bernanke told a questioner after giving a speech to a Brookings Institution conference.
"The general view of most forecasters is that that pace of growth in 2010 will be moderate, less than you might expect given the depth of the recession because of ongoing headwinds," he said, warning that this would delay job creation.
US unemployment has soared to 9.7 per cent since the recession began in December 2007, and is forecast to push to 10 per cent in the months ahead.
He cautioned that growth next year would probably be not much faster than the economy's so-called long-run potential rate, which meant that it would be slow to take up slack and pare back the level of unemployment.
"Therefore the unemployment rate will tend to come down quite slowly," the Fed chairman said.
Elsewhere, US retail sales rose at the fastest pace in three-and-a-half years in August and a gauge of New York State manufacturing hit a near two-year high, offering hope of a solid recovery from recession.
A separate report today showed prices received by US producers rose more than expected last month, suggesting business was improving.
Economists are generally in agreement that the US economy is in the early phase of recovery from the worst recession in seven decades. But many remain worried about lacklustre consumer demand, with rising unemployment decimating incomes.
The Federal Reserve will consider the data at a meeting next week at which officials will resume debate on how best to withdraw the extraordinary support they are providing the economy.
Reuters