Washington – Federal Reserve Chairman Ben Bernanke said Tuesday that he expects the U.S. economy "to pick up somewhat" in the second half of the year.
"Overall, the economic recovery appears to be continuing at a moderate pace, albeit at a rate that is both uneven across sectors and frustratingly slow from the perspective of millions of unemployed and underemployed workers," he said in a speech at the International Monetary Conference in Atlanta.
Bernanke sought to downplay last month's discouraging unemployment data, which showed the official jobless rate climbing from 9 percent to 9.1 percent.
"Although the jobs market remains quite weak and progress has been uneven, overall we have seen signs of gradual improvement," the Fed chairman said.
He also defended the Federal Reserve's $600 billion bond purchase program, which is set to conclude this month, and said that in light of continuing economic weakness, U.S. interest rates would need to remain low for an "extended period."
"The U.S. economy is recovering from both the worst financial crisis and the most severe housing bust since the Great Depression," Bernanke said. "In this context, monetary policy cannot be a panacea."
"Still," he added, "the Federal Reserve's actions in recent years have doubtless helped stabilize the financial system, ease credit and financial conditions, guard against deflation, and promote economic recovery."
Regarding inflation, Bernanke said he and most of his colleagues on the Federal Open Market Committee see recent price increases as "transitory" and expect that inflation will remain "subdued in the medium term."
In that vein, he said the easing of global commodities prices could "be an indication that such moderation is occurring."
The Fed's most recent forecast for U.S. economic growth, issued in April, calls for gross domestic product to rise this year by between 3.1 percent and 3.3 percent, down from the central bank's earlier projection of a 3.9 percent gain in GDP.