国际英语新闻：Bernanke sees recovery strengthening, but challenges remain tough

WASHINGTON, Feb. 3 (Xinhua) -- U.S. Federal Reserve Chairman Ben Bernanke Thursday said that the economic recovery is taking on an improved picture, however, the challenges, including to create jobs and restore fiscal sustainability, remain tough.

ECONOMIC RECOVERY STRENGTHENING

"The economic recovery that began in the middle of 2009 appears to have strengthened in recent months," Bernanke told reporters at the National Press Club in Washington. "More recently, we have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold. Notably, we learned last week that households increased their spending in the fourth quarter, in real terms, at an annual rate of more than 4 percent."

The central bank chief said that businesses' investments in new equipment and software grew robustly over most of last year, as firms replaced aging equipment and as the demand for their products and services expanded.

U.S. Federal Reserve Chairman Ben Bernanke (L) delivers a speech at a luncheon of the National Press Club in Washington D.C., capital of the United States, Feb. 3, 2011. Bernanke Thursday said that the country must take proper measures to address its "daunting" long-term fiscal challenges

He said that improving household and business confidence, accommodative monetary policy, and more-supportive financial conditions, including an apparent increase in the willingness of banks to make loans, seems likely to lead to a more rapid pace of economic recovery in 2011 than the Fed's expectation last year.

On the inflation front, "we have recently seen significant increases in some highly visible prices, notably for gasoline." Nevertheless, overall inflation remains quite low, which provides evidence for the Fed to keep its loose monetary policy.

"Over the 12 months ending in December, prices for all the goods and services purchased by households increased by only 1.2 percent, down from 2.4 percent over the prior 12 months," he said.

According to the latest government data, the U.S. economy grew at 3.2 percent in the forth quarter in 2010, quicker than the 2.6 percent pace in the third quarter of 2010. It was the best quarterly showing since the start of last year.

For all of 2010, the economy grew 2.9 percent, the most since 2005. It was an improvement from 2009 when the economy suffered its worst decline in more than 60 years.

MAJOR CHALLENGES

The Fed chief said that although the economic recovery is strengthening, to date, "growth has not been fast enough to bring about a significant improvement in the job market."

While indicators of spending and production have, on balance, been encouraging, the job market has improved only slowly. Following the loss of about 8.5 million jobs in 2008 and 2009, private-sector employment showed gains in 2010.

However, these gains were barely sufficient to accommodate the inflow of recent graduates and other new entrants to the labor force and, therefore, not enough to significantly reduce the overall unemployment rate, which is currently at 9.4 percent.

"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," Bernanke said.