Haraz N. Ghanbari/AP
Federal Reserve Chairman Ben Bernanke spoke Tuesday at the Brookings Institution in Washington.
Federal Reserve Chairman Ben Bernanke spoke Tuesday at the Brookings Institution in Washington. Haraz N. Ghanbari/AP
The economy is "very likely" out of the worst recession since the 1930s, Federal Reserve Chairman Ben Bernanke said Tuesday, but he warned that unemployment could stay at high levels for some time to come.
Bernanke, speaking at the Brookings Institution in Washington, said that while the economy is growing again, it won't be enough to prevent the current 9.7 percent unemployment rate from creeping higher.
"The recession is very likely over at this point," he said in response to a question. "Unfortunately, unemployment will be slow to come down," he said, adding that continued joblessness will make it "feel like a very weak economy for some time to come."
The Fed chairman's remarks came on the same day the Commerce Department reported the biggest jump for retail sales in more than three years. The data was bolstered by a major shot in the arm to auto sales spurred by the federal Cash for Clunkers program, but economists said the healthy 2.7 percent uptick was broader based, and pointed to more positive consumer sentiment.
Separately, the Labor Department reported a 1.7 percent increase in U.S. producer prices last month, though most of it was attributable to a big surge in gasoline prices.
Bernanke also said he is confident that Congress will enact a revamp of the nation's financial rule book to prevent a future crisis from happening.
"I feel quite confident that a comprehensive reform will be forthcoming," Bernanke said. It has been "too big a calamity" over the past year, with the near meltdown of the U.S. financial system, for Congress not to take action, he added.
President Obama, speaking to autoworkers at a Lordstown, Ohio, GM plant, picked up his theme that as the economy recovers, it is important that there is not simply a return to the business as usual that precipitated the current crisis.
"There are some who see this pain and suggest that it's all somehow inevitable — that the only way for America to get ahead is for communities like yours to be left behind. But we know better," he told cheering autoworkers.
"You deserve better than the attitude that's prevailed from Washington to Wall Street to Detroit for too long; an attitude that valued wealth over work, selfishness over sacrifice, and greed over responsibility," he said.
The president congratulated the workers for having produced 1 million Chevy Cobalts at the plant, which he said was "one of GM's most sought-after cars" under the Cash for Clunkers program that gave incentives to anyone trading in a gas guzzler for a newer, more fuel efficient vehicle.
He also said his administration was launching a new national standard aimed at boosting mileage and cleaning up the environment. The new standards call for the auto industry's fleet of new vehicles to average 35.5 miles per gallon by 2016.
Transportation Secretary Ray LaHood and EPA Administrator Lisa Jackson released the proposed regulations at the White House, the follow-up to Obama's announcement in May that the government regulations would link emissions and fuel economy standards.
"This action will give our auto companies some long-overdue clarity, stability and predictability," the president said.
From NPR staff and wire service reports