US Federal Reserve Chief Ben Bernanke on Thursday said the US economy could strengthen up to four percent this year, but hiring will likely lag behind.
“We see the economy strengthening,” Bernanke said during a Small Business Forum in Washington D.C co-sponsored by the FDIC and CNBC.
“It has looked better in the last few months. We think a three to four percent-type of growth number for 2011 seems reasonable.”
However, despite the projected growth, Bernanke said “that’s not going to reduce unemployment at the pace we’d like it to, but certainly it would be good to see the economy growing and that means more sales, more business.”
The Fed chairman said the crumbled housing market is recovering but it is “a slow process.” “It’s not going to happen overnight,” Bernanke said, adding “the economy’s got to come back. Confidence has to come back.” He also stressed there needs to be a balance between cautious banks reluctant to make loans and small businesses that are unable to get credit.
“We got into trouble in the first place by making too many bad loans,” he said. “So you have to make good loans. And you have to have credit-worthy borrowers. But we can do that by putting in the effort.” Bernanke’s remarks come after the Federal Reserve released a report indicating the US economy is gaining traction.