29 February 2012 20:17 [Source: ICIS news]
WASHINGTON (ICIS)--Federal Reserve Board chairman Ben Bernanke on Wednesday told Congress that while the ?xml:namespace>
In presenting his semi-annual monetary report to Congress, Bernanke told the House Committee on Financial Services that economists and policymakers at the Fed anticipate that US gross domestic product (GDP) growth this year will be around 2.5%.
That rate of GDP expansion would be a marked improvement from the 1.7% GDP advance recorded for 2011, but it would still be below what economists call
In addition, Bernanke noted that the Fed’s forecast for 2.5% GDP growth this year is considerably lower than the central bank’s predictions in mid-2011 for 2012 economic growth.
“A number of factors have played a role in this reassessment,” Bernanke said.
“The recovery has been somewhat slower than previously estimated [and] fiscal and financial strains in
In addition, “problems in
Bernanke said that while
“Real household income and wealth were flat in 2011, and access to credit remained restricted for many potential borrowers,” he said, noting that while consumer sentiment has rebounded somewhat from a sharp drop in mid-2011, it remains relatively low.
Consumer spending is the principal driving force of the
Limited access to credit also hinders the long-depressed
“Unfortunately, many potential home buyers lack the down payment and credit history required to qualify for loans,” he told the House panel, “others are reluctant to buy a house now because of concerns about their income, employment prospects and the future path of home prices.”
“Notwithstanding the better recent data, the job market remains far from normal,” Bernanke said.
“The unemployment rate remains elevated, long-term unemployment is still near record levels, and the number of persons working part time for economic reasons is very high,” he added.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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