Ben Bernanke Surprised By Continuing Consumer Caution
Ben Bernanke, the US Federal Reserve chairman, said Thursday that he's surprised how cautious consumers remain more than two years since the recession officially ended.
Speaking at a luncheon in Minneapolis, he noted several factors influencing consumer caution, including the absence of home construction and higher gasoline prices.
Once again, he warned that reductions in government spending amounted to reductions in short-term growth, AP reports.
The Fed chairman also acknowledged that many consumers are weighed down by the burden of economic issues.
''The persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high,” Bernanke noted.
He continued, ''Even taking into account the many financial pressures that they face, households seem exceptionally cautious,” reports AP.
However, Dr. Bernanke stopped short of suggesting any new plans by the Fed to stimulate the economy.
John Williams, the president of the Federal Reserve Bank of San Francisco, told the Seattle Rotary Club on Wednesday that “people are on edge,” AP reports.
''In fact, the latest consumer sentiment readings are near the all-time lows recorded in late 2008 during the most terrifying moments of the financial crisis,” he explained.
Williams cited a recent survey finding that 62 per cent of households expected their income to stay the same or decline over the next year, the bleakest outlook in three decades.
''It's hard to have a robust recovery when Americans are so dispirited,” Williams said, reports AP.