US economy to fare better in coming quarters: Bernanke
04 Jan 2014
US Federal Reserve chairman Ben Bernanke has predicted that the US economy would fare better in coming quarters.
Addressing the annual meeting of the American Economic Association held in Philadelphia in Pennsylvania, yesterday, he said, "The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for US economic growth in coming quarters."
He added, the US economy had made ''considerable progress'' since the recovery officially got underway four and a half years ago.
"The unemployment rate has fallen from 10 per cent in the fall of 2009 to 7 per cent recently. Industrial production and equipment investment have matched or exceeded pre-recession peaks," Bernanke said.
"The banking system has been recapitalised, and the financial system is safer," he added.
The national unemployment rate was down to 7 per cent in November, its lowest level in five years, according to figures from the Labor Department.
Bernanke said, "Despite this progress, the recovery clearly remains incomplete. At 7 percent, the unemployment rate still is elevated."
"The number of long-term unemployed remains unusually high, and other measures of labour underutilization, such as the number of people who are working part time for economic reasons, have improved less than the unemployment rate," he added.
Bernanke, 60, looked back on his eight years as chief of the US central bank at the annual meeting of the American Economic Association.
The fed chief's second four-year term as expires 31 January, and Janet Yellen, currently the Fed's vice chairman, would succeed him 1 February, if confirmed in the US senate, which would vote Monday.
Under his stewardship of the Fed since 2006, new monetary policy tools were introduced in a bid to revive an economy hit by the worst financial downturn since the Great Depression.
The policy-making committee of the Fed last month decided to bring to an end, a massive bond-buying campaign, a step toward unwinding the central bank's broader stimulus programme as confidence returned that the economy was steadily growing.
The Fed plans to wind down purchases of Treasury and mortgage-backed securities to $75 billion this month from $85 billion in December (See: Fed to cut bond-buying by $10 bn from January, keep rate unchanged), with the purchases shrinking to nothing by the end of the year, in a series of steps.
According to Bernanke, the decision ''did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed.''
''Rather, it reflected the progress we have made toward our goal of substantial improvement,'' he told an enthusiastic audience.
