Bernanke: Economic Outlook Gloomy

(Newsroom America) -- Federal Reserve Chairman Ben Bernanke on Tuesday offered a gloomy forecast for unemployment and the U.S. economy in the coming months, but said the Fed was not set to offer more monetary easing.

"We are looking very carefully at the economy, trying to judge whether or not the loss of momentum we’ve seen recently is enduring, and whether or not the economy is likely to continue to make progress," he said, noting that reducing the nation's 8.2 percent jobless rate "seems likely to be frustratingly slow" in the coming months.

Bernanke's comments, made in testimony before Congress, disappointed markets, causing stocks to fall but the dollar to rise before turning around before midday on Wall Street.

The Fed chairman told lawmakers that recent economic data points to annual growth of less than 2 percent in the second quarter, far less than what is needed to create jobs, economists have said.

"Households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low," he said.

Bernanke listed a set of options for further easing of monetary policy but did not say which he preferred, the Financial Times reported.

"The logical range includes different types of purchase programs. That could include Treasuries or include Treasuries and mortgage-backed securities. Those are the two things we’re allowed to buy," he said.

"We haven’t really come to a specific choice at this point, but we are looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market."

The Obama administration has been struggling with poor economic data for months, following a spurt of hiring that led to better employment figures this spring.

But as summer edged on, hiring fell off considerably; the economy created just 80,000 jobs last month as unemployment held steady.

The poor jobs reports are grist for presumptive GOP presidential nominee Mitt Romney, however, who has been blaming Obama's economic policies for the slow jobs growth.

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