Reporting from Washington— Federal Reserve Chairman Ben S. Bernanke, facing an economy and job market that are growing at a snail's pace, on Wednesday stuck to the view that temporary factors were behind the recent slowdown and that the recovery would pick up speed in the coming months.
In his semiannual report to Congress on the economy and monetary policy, the Fed chairman said that the "apparent stabilization in the prices of oil and other commodities should ease the pressure on household budgets." He added that the economy should also get a lift this summer as car manufacturers increase production after cutting back because of disruptions from the earthquake and tsunami in Japan.
"The anticipated pickups in economic activity and job creation, together with the expected easing of price pressures, should bolster real household income, confidence, and spending in the medium run," he said in prepared remarks to the House Financial Services Committee.
"Ben Bernanke is pretty much confirming some of the things we saw in the minutes of the June meeting of the Fed released yesterday--that the Fed is not down to our last bullet...it still has ammunition to support the economy. At the moment, this is welcome news to the stock market. But in the oil markets, we are still waiting for the latest Energy Department inventory data for last week, which is tilting toward the bearish side. So it's hard to say at this point how the oil markets will fare with both issues being weighed."