U.S. Federal Reserve Chairman Ben Bernanke made his most emphatic declaration yet that the recession has ended, as a separate data release Tuesday showed a rebound in retail sales. But Mr. Bernanke reiterated that tight credit conditions and a soft labor market will prove to be a challenge.
From a technical perspective, the "recession is very likely over at this point," Mr. Bernanke said in a question-and-answer session at the Brookings Institution.
But he added that even if recovery is under way, the economy will still seem weak because credit conditions remain tight and any decline in the unemployment rate will probably happen gradually. He noted that one risk is that the economy will grow in the second half of 2009, but not enough to trigger a rapid recovery in employment.
If there is only moderate economic growth, unemployment "will be slow to come down," he said. "It will come down, but it will take some time."
