Bernanke gives upbeat assessment

Charlotte Business Journal

In his most optimistic economic forecast since the financial markets plunged nearly a year ago, Federal Reserve Chairman Ben Bernanke says, “The prospects for a return to growth in the near term appear good.”

Bernanke made the comments Friday in a speech at an annual Fed event in Jackson Hole, Wyo.

It’s the latest in a string of increasingly hopeful pronouncements from Fed officials that the recession will soon be over — or might be already.

Earlier this month, the Fed said “economic activity is leveling out.” And in late July, it said the Western states were among four of its 12 regions of the country where the economy was showing “signs of stabilization.”

Other statistical indicators have pointed toward the same conclusion over the past two months — though this week’s dip in consumer spending and unexpectedly sharp growth in new unemployment claims suggest that any recovery is tentative and fragile.

Indeed Bernanke, in a speech that charted key events over the course of the downturn, said the credit markets remain constricted and financial institutions could expect additional losses on underperforming assets.

“The situation is not back to normal,” he said.