Federal Reserve chairman Ben Bernanke said yesterday the recession was “very likely over,” as consumers showed clear signs of spending again. Bernanke, who had become positive in recent weeks amid signs of third-quarter growth, said for the first time that forecasters agree “at this point that we are in a recovery. ” The rebound, he added, will be moderate and produce few jobs. “Even though from a technical perspective the recession is very likely over at this point, it is still going to feel like a very weak economy for some time as many people still find their job security and their employment status is not what they wish it was,” he said. His remarks, made after a speech at the Brookings Institution in Washington, came just after the Commerce Department reported retail sales climbed 2.7 percent in August after falling 0.2 percent in July, reported the Wall Street Journal. Much of the increase was auto-related from the “cash for clunkers” rebate program, as well as rising energy prices. But gains were also broad-based, reflecting discretionary spending on restaurants, which are often more closely tied to the economy’s health. Restaurants rose a seasonally adjusted 0.3 percent from July — the category’s largest increase in six months. Sporting and entertainment goods climbed 2.3 percent, and general-merchandise store sales were up 1.6 percent. Auto and parts sales jumped 10.6 percent in August from the previous month. Excluding autos, sales rose 1.1 percent. Despite the first gain in underlying retail sales in six months and a lift in positive consumer sentiment, retail sales are still 5.3 percent lower than a year earlier. Meanwhile, the producer price index for finished goods increased 1.7 percent on a seasonally adjusted basis in August as a result of rising energy prices, the Labor Department said Tuesday. Excluding food and energy, prices rose 0.2 percent from July.
Bernanke Confident Recession is Over
Bernanke, who had become positive in recent weeks amid signs of third-quarter growth, said for the first time that forecasters agree “at this point that we are in a recovery.”
September 16, 2009