Fed Chairman Bernanke Believes Consumer Spending To Improve In Forthcoming Quarters

According

, Federal Reserve Chairman Ben S. Bernanke said that even though consumer confidence is being driven down by weak job gains, hike in wages is likely to drive household spending in the forthcoming quarters. While speaking in Charleston, South Carolina, Bernanke said, although the US has a long “way to go” to recover completely, “rising demand from households and businesses should help sustain growth.” In a response to a question from an audience, Bernanke replied, “We are maintaining strong monetary policy support for the recovery.” He withheld discussing any further action that the Fed might take to boost growth. Bernanke also remarked that consumer spending, which accounts for roughly 70% of the economy, may improve in the forthcoming quarter, from the recent slow pace. According to John Ryding, a former Fed researcher, Bernanke’s remarks indicate that he and his colleagues will “stop short of making major changes in their policy statement or taking new steps to lower interest rates and reduce unemployment.” Ryding, who is also a co-founder and chief economist at RDQ Economics LLC, “Further action still has a pretty high hurdle to get over. The status quo on policy remains.” While addressing a group of lawmakers from 15 states including Georgia, Texas and Virginia, Bernanke said, “The economy “is now expanding at a moderate pace…” He mentioned that the significant restraints in the form of housing, commercial real estate and the labor market persist, dragging the recovery. Read more from