Federal Reserve Chairman Ben Bernanke declared Friday that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression.
Economic activity in both the U.S. and around the world appears to be “leveling out,” and “the prospects for a return to growth in the near term appear good,” Bernanke said in a speech at an annual Fed conference in Jackson Hole, Wyo.
The more upbeat assessment was consistent with the Fed’s observations earlier this month as it took a small step toward pulling back some emergency programs to revive the economy.
Still, Bernanke stressed Friday that despite much progress in stabilizing financial markets and trying to bust through credit clogs, consumers and businesses are still having trouble getting loans. The situation is not back to normal, he said.
Restoring the free flow of credit is a critical component to a lasting recovery.
“Although we have avoided the worst, difficult challenges still lie ahead,” Bernanke told the gathering. “We must work together to build on the gains already made to secure a sustained economic recovery.”
Strains in financial markets worldwide persist. Financial institutions face “significant additional losses” on soured investments and many businesses and households are experiencing “considerable difficulty” in getting loans, he said.
The Fed chief’s remarks come two years after the financial crisis broke out and nearly one year after it had deepened to the point of sending the nation into a near meltdown.
Copyright 2009 The Associated Press