Federal Reserve Chairman Ben S. Bernanke said the U.S. expansion will remain moderate as the economy contends with weak construction spending and high unemployment.
“On balance, the incoming data suggest that growth in private final demand will be sufficient to promote a moderate economic recovery in coming quarters,” Bernanke said in testimony to Congress yesterday.
But the 56-year-old former Princeton University economist didn’t mince words concerning the forces constraining a U.S. recovery. “Significant restraints on the pace of the recovery remain, including weakness in both residential and nonresidential construction and the poor fiscal condition of many state and local governments,” Bernanke added.
U.S. central bankers are debating how and when to pull back on record monetary stimulus as the economy recovers from the worst slump since the Great Depression.
Bernanke reiterated his call for lawmakers to set a path of reducing the record federal budget deficit.
“A credible plan for fiscal sustainability could yield substantial near-term benefits in terms of lower long-term interest rates and increased consumer and business confidence,” he said.