Federal Reserve Chairman Ben Bernanke said the United States can expect "moderate" economic growth in the coming quarters, with some of the weaknesses of the first half of 2011 persisting.
Bernanke also told members of Congress that the inflation pressures of the first half of 2011 were transitory and should ease, and so the Fed expects to keep its ultralow interest-rate policy in place "for an extended period."
In his prepared, semi-annual testimony to Congress, Bernanke said the economy should pick up speed in the second half, to achieve a full-year expansion of 2.7% to 2.9%.
"The recent weaker-than-expected economic performance appears to have been the result of several factors that are likely to be temporary," he said.
But the Fed nevertheless sees "at least some part of the first-half slowdown as persisting for a while," he said.
That includes slow growth in consumer spending, the effects of the tightening of spending by authorities at all levels of government, and the still-depressed housing sector.
On the other hand, he said, the "apparent" stabilization of oil prices and those of other commodities "should ease the pressure on household budgets."
He also said there are "bright spots" in the economy in the export sector and the investments that businesses are making in equipment and software.
His remarks came after several weeks of bad data on the economy, which have pushed share prices down and dimmed projections of growth for the second half.
After last Friday's data showed that few jobs were created over the past two months, and figures on Tuesday showed a widening trade deficit in May, the private group Macroeconomic Advisors cut its estimate of second-quarter growth to a snail-like 1.6%, after the tepid 1.9% pace of the first quarter.
Copyright Agence France-Presse, 2011
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